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					MAIN EVENTS OF THE YEAR
Passenger numbers at Dublin, Shannon and Cork airports increased by 4.3%
to 19.3 million – a new record

Dublin Airport was one of the fastest growing major airports in Europe and now
has over 15 million passengers

€96 million was invested by the Group in infrastructure

Over 80 airlines served 138 routes. 18 new routes were launched to North
America, Continental Europe and the UK

Group profit after tax was €36.2 million compared to €11.6 million in 2001,
generated on revenues of €421 million

Aer Rianta International recorded a profit after tax of €13.2 million

An Taoiseach, Bertie Ahern T.D., opened the new terminal extension at
Dublin Airport in June

Customer service level agreements were developed with airlines and ground
handlers at Dublin Airport and a Passenger Services Council was established at
the Airport to enhance passenger service standards

A major internal re-structuring programme continued including the extensive
application of new technologies

A €15 million restoration and refurbishment programme was completed at
Killarney Great Southern Hotel




The 2002 annual report and information on Aer Rianta can be found on our official website



www.aerrianta.com
CONTENTS
           Board of Directors 02
           Group Structure & Management Team 03
           Chairman’s Statement 04
           Chief Executive’s Review 12
           Review of the Year 16
           Airport Management 17
           Airport Retailing 22
           Aer Rianta International 24
           Great Southern Hotels 26
                                                            1
           Human Resources 28
           Ancillary Activities 30
           Financial Review 32
           Route Network 36
           Directors’ Report & Financial Statements 37
           Five Year Business Summaries 70
           General Business & Aeronautical Information 74
                                                                                                                   NOEL HANLON

                                                                                                                   Noel Hanlon was first appointed Chairman
                                                                                                                   of the Board in October 1994 and was
                                                                                                                   re-appointed for a second term in October
                                                                                                                   1999. Noel is also Chairman of subsidiary
                                                                                                                   companies, Aer Rianta International cpt,
                                                                                                                   Aer Rianta Finance plc, Aer Rianta
                                                                                                                   Operations Ltd and Great Southern Hotels
                                                                                                                   Ltd. He is Deputy Chairman of Birmingham
                                                                                                                   Airport Holdings Ltd and Birmingham
                                                                                                                   International Airport Ltd. He is Chairman
                                                                                                                   of the Remuneration, Health & Safety and
                                                                                                                   Security Committees.
    BOARD OF DIRECTORS




                         CECIL BRETT                                 JOHN BURKE                                               PETER DUNNE

                         Cecil Brett was appointed to the Board      John Burke was appointed Chief Executive in              Peter Dunne was first appointed to the
                         on 1 January 2002 under the Worker          March 1998 and as a member of the Board in               Board in January 1994 under the
                         Participation (State Enterprises) Acts,     September 1998. John is a Director of Aer                Worker Participation (State Enterprises)
2                        1977 and 1988. Cecil is a Director          Rianta International cpt, Great Southern Hotels          Acts, 1977 and 1988 and was re-
                         of Aer Rianta International cpt and         Ltd and Chairman of Aer Rianta International             appointed in January 1998 and January
                         Chairman of the Irish Parking               (North America) Inc. John is a member of the             2002. Peter is a Director of Aer Rianta
                         Association. He joined the company in       Supervisory Board of Düsseldorf Airport and is           International cpt and Aer Rianta
                         1974 and works as Project Director -        a Vice President of Airports Council                     International (North America) Inc.
                         Car Parks, Dublin Airport. Cecil is         International (ACI) Europe and a member of               Peter joined the company in 1971 and
                         a member of the Health &                    the World Governing Board of ACI. He is also a           works in the Maintenance Department
                         Safety Committee.                           member of the national executive council of              at Dublin Airport. Peter is a member of
                                                                     IBEC. John is a member of the Health & Safety            the Health & Safety Committee.
                                                                     and Security Committees.




                         PAT FITZGERALD                              FREDA HAYES                                              LIAM J. MEADE

                         Pat Fitzgerald was first appointed to the   Freda Hayes was appointed to the Board                   Liam Meade was appointed to the Board in
                         Board in January 1994 under the Worker      in June 2001. Freda is Chief Executive of                April 2001. Liam is a Director of Aer Rianta
                         Participation (State Enterprises) Acts,     Blarney Woollen Mills Group. Freda is a                  International cpt and Aer Rianta International
                         1977 and 1988 and was re-appointed in       Director of Aer Rianta International cpt                 (Middle East) W.L.L. He is currently Vice
                         January 1998 and January 2002. Pat is a     and Lenrianta JSC. Freda is also a Director              President, Marketing with Shannon Engine
                         Director of Aer Rianta International cpt.   of IBEC and the Small Firms Association.                 Support Ltd, a Shannon-based aircraft engine
                         Pat joined the company in 1966 and works    She is a Life Fellow of the Irish                        leasing concern. Liam holds Board
                         in the Catering Department at Shannon       Management Institute. Freda is a                         memberships in a number of Irish aviation-
                         Airport. Pat is a member of the Board       member of the Board Audit and                            related companies and previously held the
                         Audit and Health & Safety Committees.       Remuneration Committees.                                 position of Executive Vice President with GPA
                                                                                                                              Group plc and has a long and varied career in
                                                                                                                              international aviation management, including
                                                                                                                              10 years in the United States. Liam is
                                                                                                                              Chairman of the Board Audit Committee and
                                                                                                                              is a member of the Remuneration Committee.
                                   Dublin Airport
                                   Shannon Airport
                                   Cork Airport
GROUP STRUCTURE




                                Aer Rianta International                                                        Great Southern Hotels

                                Airports               Airport Retailing                                        Cork Airport
                                                                                                                Corrib
                                Birmingham             Europe
                                                       Cyprus / Greece                                          Dublin Airport
                                Düsseldorf                                                                      Eyre Square
                                                       CIS
                                                       Moscow / St. Petersburg / Kiev
                                Hamburg                                                                         Killarney
                                                                                                                                                     3
                                                       Middle East                                              Parknasilla
                                                       Bahrain / Beirut / Kuwait / Oman / Qatar
                                                                                                                Rosslare
                                                       North America                                            Shannon Airport
                                                       Montreal / Edmonton / Winnipeg /
                                                       Ottawa / Halifax                                         City Hotel, Derry
          MANAGEMENT TEAM




                            JOHN BURKE                   RAY GRAY                       ALAN LEVEY                          FRANK O’CONNELL
                            Chief Executive              Director - Finance             General Manager -                   Director - Retail
                                                                                        Safety & Aviation Standards
                            MARGARET SWEENEY             TOM HAUGHEY                                                        JOE O’CONNOR
                            Deputy Chief Executive       Director - Market              EAMONN MCKEON                       Director -
                                                         Development & Strategy         Chief Executive -                   Cork Airport
                            OLIVER CUSSEN                                               Great Southern Hotels
                            Director -                   DAVID HEPBURN                                                      JOHN O’MAHONEY
                            Corporate Affairs &          General Manager -              EAMONN MORAN                        Group Chief Accountant
                            Company Secretary            Community Affairs &            General Manager -
                                                         Environment                    Aviation Security                   TONY SWEENEY
                            EAMON FOLEY                                                                                     General Manager -
                            Director General -           ROBERT HILLIARD                MARTIN MORONEY                      Group Internal Audit
                            Aer Rianta International     Director - Dublin Airport      Director - Shannon Airport
                                                                                                                            VINCENT WALL
                            MARK FOLEY                   DAMIAN LENAGH                  MICHAEL MURPHY                      Director -
                            Director -                   Group Head - Human Resources   General Manager -                   Communications
                            Capital Programmes                                          Group Property
                                                                                                                              Noel Hanlon, Chairman


                           Aer Rianta is recognised as one of Ireland’s most important    Aithnítear go bhfuil Aer Rianta ar cheann de na cuideachtaí is
  Chairman’s Statement
Ráiteas an Chathaoirligh




                           and progressive companies. It manages and operates             tábhachtaí agus is mó dul chun cinn in Éirinn. Riarann sé agus
                           Dublin, Cork and Shannon airports on behalf of the             láimhseálann sé Aerfoirt Átha Cliath, Chorcaí agus na
                           Government. It also has significant investments in             Sionainne ar son an Rialtais. Freisin, tá infheistíochtaí
                           Birmingham, Düsseldorf and Hamburg airports. Aer Rianta        éifeachtacha aige in Aerfoirt Birmingham, Düsseldorf agus
                           may be said, without exaggeration, to have realised the        Hamburg. Is féidir a rá, gan bhréag gan áibhéil, gur eirigh le
                           original vision of Sean Lemass i.e. a company in public        Aer Rianta radharc bunaidh Sheáin Lemass a bhaint amach,
                           ownership, operating on a strictly commercial basis, while     i. cuideachta in úinéireacht phoiblí ag oibriú go beacht ar
                           delivering effectively a key component of the country's        bhonn tráchtála, agus ag an am céanna, ag cur ar fáil go
                           economic well-being, namely airport infrastructure.            héifeachtúil comhpháirt tábhachtach de leas eacnamaíoch na          5
                                                                                          tíre, is é sin bonneagar aerfort.
                           We are regarded as one of the top five duty-free retailers
                           in the world with operations in 14 different countries         Meastar go bhfuilimid ar cheann den cúig miondíoltóirí saor
                           including Russia, Canada, the Middle East, the Ukraine and     ó dhleacht is mó clú sa domhan, le gníomhaíochtaí i 14 tíortha
                           Cyprus. We are also involved in the hotel industry through     éagsúla, an Rúis, Ceanada, an Meán-Oirthear, an Úcráin agus
                           our ownership of the Great Southern Hotel Group, which         an Chipir san áireamh. Tá baint againn freisin le tionscal na
                           comprises nine hotels, one of which is a new hotel in Derry    n-óstlann trínár n-úinéireacht Ghrúpa Mór Óstlanna an
                           and in which we have a 25% shareholding and a                  Deiscirt; tá naoi n-óstáin sa Ghrúpa, ceann de is ea óstán nua
                           management franchise. The remainder are 100% owned.            i nDoire; tá 25% scairshealbhóireacht agus ceadúnas
                                                                                          bainisteoireachta againne san óstán seo. Tá an chuid eile
                           The Group has more than 3,400 employees and has been           100% inár n-úinéireacht.
                           continuously restructuring, with reorganisation of work
                           practices and extensive application of modern technology.      Tá níos mó ná 3,400 fostaithe ag an Grúpa agus tá athchóiriú
                           This enables us to compete effectively in the rapidly          á dhéanamh aige i gcónaí, le atheagar i gcleachtaí oibre agus
                           changing business environment in which we operate.             in úsáid teicneolaíochta nua-aoisigh. Cabhraíonn sé sin linn
                           Our success has been achieved through strong                   dul in iomaíocht go h-éifeachtúil i dtimpeallacht ghnó atá ag
                           partnerships with staff and trade unions.                      athrú go tapaidh agus ina bhfuilimid ag obair. D’eirigh linn san
                                                                                          obair seo trí pháirtíochtaí láidre leis an bhfoireann agus na
                           The Board fully recognises and accepts the right of the        ceardchumainn araon.
                           Minister and Government to make policy decisions that
                           affect the organisation. The Board currently has the           Aithníonn an Bord é go hiomlán agus glacann sé go bhfuil sé
                           statutory responsibility for formulating and implementing      de cheart ag an Aire agus an Rialtas breitheanna polasaí a
                           policy for the management and development of the               dhéanamh a mbaineann leis an eagraíocht. I láthair na huaire tá
                           airports. It also has a responsibility to its shareholder to   an cúram reachtúil ar an mBord polasaí a dhéanamh agus a
                           ensure that there is no diminution of shareholder value.       chur i bhfeidhm le haghaidh bainisteoireachta agus forbartha
                           The Board is concerned that present proposals being            na n-aerfort. Tá sé freagrach freisin dá scairshealbhóir chun
                           formulated by the Department of Transport may result in a      deimhin a dhéanamh de nach mbeidh laghdú i luach
                           significant reduction in shareholder value and could           scairshealbhóireachta. Tá imní ar an mBord go mbeidh laghdú
                           dissipate what the Board considers to have been a              mór i luach scairshealbhóireachta de bharr tairiscintí atá á
                           successful national airport strategy. As Aer Rianta            ullmhú faoi láthair ag an Roinn Iompair, agus go ndéanfar
                           continues to have statutory responsibility for the three       straitéis aerfort náisiúnta, a mheasann an Bord a bheith rathúil,
                           airports, it is appropriate that it should comment on any      a scaipeadh. Ós rud é go bhfuil cúram reachtúil leanúnach ag
                           proposals, which may have these risks.                         Aer Rianta i gcomhair na dtrí aerfort, is cuí go dtabharfadh sé a
                                                                                          thuairimí ar aon tairiscintí ina mbeadh na priacail seo.
    Following his appointment last June, the Minister for           Tar éis a cheapacháin an Meitheamh seo caite, d’fhógair an
    Transport, Séamus Brennan T.D., announced a number of           t-Aire Iompair, Séamus Ó Braonáin, TD, roinnt tionscnamh a
    initiatives that could impact on the structure and funding      d’fhéadfadh tionchar a bheith acu ar structúr agus
    requirements of Aer Rianta. These relate principally to the     riachtanais maoinithe Aer Rianta. Baineann saidsean i
    provision of greater autonomy for Cork and Shannon              gcoitinne le soláthar féinrialach níos mó do Aerfoirt Chorcaí
    airports and the possible construction of a terminal or         agus na Sionnaine agus le tógáil críochfoirt nó críochfort ag
    terminals independent of Aer Rianta at Dublin Airport.          Aerfort Átha Cliath, gan aon bhaint a bheith acu le Aer
    Regardless of what decision is taken by the Government on       Rianta. Gan cuimhneamh ar socrú an Rialtais maidir le
6   the issue of the independent terminal at Dublin Airport, Aer    críochfort neamhspleách ag Aerfort Átha Cliath, tá
    Rianta under current legislation has a statutory obligation     oibleagáid reachtúil ar Aer Rianta, faoi reachtú atá ann, le
    for the development and management of the Airport. There        haghaidh forbartha agus bainisteoireachta an aerfoirt.
    is an urgent need to move forward with the construction of      Tá geárghá le tógáil Píara D a chur chun cinn, rud a
    Pier D for which planning permission has recently been          fuarathas ceadú pleanála dó le déanaí, ionas nach dtárlóidh
    obtained so that the chaos that reigned at Dublin Airport in    arís an t- anord a bhí ag Aerfort Átha Cliath sna nóchaidí
    the late nineties does not recur. This chaos was clearly the    deireanacha. Tá sé follasach gur eirigh an t-anord seo nuair
    result of Aer Rianta not being allowed to proceed with the      nár cheadaiodh do Aer Rianta dul ar aghaidh leis an clár
    building programme in accordance with the Board’s               foirgníochta de réir tola an Bhoird. Tá sé ar intinn ag an
    wishes. The Board is determined that as long as statutory       Bord nach dtárlóidh seo arís fad is atá freagracht reachtúil
    responsibility rests with them that this will not recur.        fúthu. Dúirt Mahatma Gandhi tráth éigin ‘braitheann an
    Mahatma Gandhi once said, “the future depends on what           tódhchaí ar cad a dheimimid sa láithreach’. Ní bhaineann
    we do in the present”. Nowhere does this apply more             seo in aon áit eile chomh mór is a bhaineann sé le Aer
    than to Aer Rianta and so we must move forward with our         Rianta , agus mar sin, caithfimid dul ar aghaidh lenár gclár
    development programme in a clear and constructive               forbartha i gcaoi atá soléir agus éifeachtach. Ni chuirfidh
    manner. The construction of Pier D will not in any way          tógail Píara D isteach i sli ar bith le tógáil críochfoirt
    interfere with the construction of an independent terminal      neamhspleách má is é seo breith an Rialtais.
    should the Government so decide.
                                                                    I nDeireadh Fómhair 2002 d’fhógair an t-Aire bunú painéil
    In October 2002 the Minister announced the establishment        triúr-fear chun comhairle a thabhairt dó maidir le leibhéal
    of a three-man panel to advise him as to the level of private   spéise san earnáil príobháideach i dtógáil críochfoirt
    sector interest in the building of an independent terminal      neamhspleách ag Aerfort Átha Cliath agus inmharthanacht
    at Dublin Airport, and the viability of such a proposal.        tairisceana mar seo. Seoladh an tuarascáil seo chuig an
    This report was delivered to the Minister in February 2003      Aire i Feabhra 2003 agus do thaispeáin sé go raibh tógáil
    and indicated that from both a technical and operational        críochfoirt neamhspleách indéanta, de réir gné teicniúla
    standpoint, the construction of an independent terminal         agus oibríochta. Do chruthaigh an tuarascáil freisin go
    was possible. The report also concluded that Aer Rianta’s       raibh na táillí aerfort faoi láthair ag Aerfort Átha Cliath fíor-
    existing airport charges at Dublin Airport were extremely       iomaíoch agus de réir dealraimh go mbeadh méadú i dtáillí
    competitive and that airport charges, whether levied by         aerfort, cibé gearrtha ag Aer Rianta nó ag oibreoir
    Aer Rianta or a private operator, would likely increase         príomháideach, tar éis tógála críochfoirt nua agus
    following the building of a new terminal and other              bonneagair riachtanaigh eile.
    necessary infrastructure.
It is Aer Rianta’s firm belief that the future development      Is é tuairim cinnte Aer Rianta go mbeidh forbairt na dtrí
of Ireland’s three principal airports is best secured by        bpríomhaerfort Éireannach as seo amach caomhnaithe sa
the strong operational, marketing and financial leverage,       slí is fearr, trí neart láidir oibríochta, margaíochta agus
which the Group structure provides, while at the same           airgeadúil, rud a sholáthraíonn structúr an Ghrúpa, agus ag
time ensuring the broadest possible level of management         an am céanna ag déanamh deimhin de go bhfuil an leibhéal
autonomy at individual airport level. It is also the            féinrialach bhainisteoireachta is leithne ag aerfoirt
company’s view that the growth and funding challenges           aonaracha. Is é dearcadh na cuideachta freisin go mbeidh
faced by Dublin Airport in particular and the customer          oibreoir aonarach aerfoirt in ann an cuibheas is fearr a
service requirements of its airline and passenger               sholáthar maidir leis na dúshláin fáis agus maoinithe atá ag
consumers, would be best served by a single                     Aerfort Átha Cliath go háirithe agus le riachtanais a aerlínte
airport operator.                                               agus a chustaiméirí.

However such decisions are solely a matter for our              Ar aon chuma, baineann a leithéid de cheisteanna lenár
shareholder. For Aer Rianta’s part, the company is              scairshealbhóir amháin. Maidir le Aer Rianta, tá an
participating fully in the consultation process initiated by    chuideachta ag glacadh a lánpháirte sa phróiseas
Government to assess the views of all key stakeholders on       comhairleoireachta atá bunaithe ag an Rialtas chun tuairimí
the future of Dublin Airport. We are confident that the         iad-san go léir go bhfuil baint acu leis, a mheasúnú maidir
management and staff of the company, which have always          leis an rud atá i ndán do Aerfort Átha Cliath. Tá dearcadh
responded positively to the competitive and fast-changing       dearfach ag bainisteoireacht agus foireann na cuideachta i
nature of the aviation industry in the past, will do so again   gcónaí maidir le iomaíoch agus luathathrú an tionscail
whatever the future brings.                                     eitlíochta agus tá muinín againn go mbeidh sé sin acu arís,
                                                                pé rud a thaganns.
The year 2002 proved a very challenging period for Aer
Rianta. The impact of the terrorist attacks in the United       Tréimhse an-dúshlánach a ba an bhliain 2002 do Aer Rianta.
States the previous September and slower global                 Tháinig tionchar na sceimhlitheoireachta ins na Stáit
economic activity, had a negative effect on the aviation        Aontaithe an Meán Fómhair roimhe agus laghdú i
industry generally. Nonetheless and despite the anticipated     ngníomhaíocht eacnamaíoch domhanda le chéile chun                    7
reduction in transatlantic traffic, a record 19.3 million       éifeacht diúltach a sholáthar don tionscal eitlíochta i gcoitinne.
passengers travelled through the Group’s airports at            Mar sin féin, agus in ainneoin an laghdú a táthar ag súil leis
Dublin, Shannon and Cork, an increase of 4% over 2001.          i dtrácht trasatlantach, bhain 19.3 milliún paisinéir (figiúr
                                                                nár sáraíodh cheana) úsáid as Aerfoirt an Ghrúpa ag Áth
Dublin Airport was one of a small number of capital city        Cliath, Sionainn agus Corcaigh, méadú 4% ar 2001.
airports throughout Europe to register any growth in
passenger traffic last year, a very creditable performance in   Bhí Aerfort Átha Cliath ar cheann de roinnt bheag de aerfoirt
the circumstances. Overall numbers rose by 5% to a new          in ardchathracha ar fud na hEorpa go raibh aon mhéadú ann
high for the Airport of 15.1 million.                           i líon na bpaisinéirí anuraidh, éacht an-mheasúil agus cúrsaí
                                                                amhlaidh. Bhí méadú 5% i líon iomlán na bpaisinéirí, go
                                                                buaic nua 15.1 milliún don aerfort.
    As expected, Shannon suffered from reduced activity on the      Mar a bhí súil leis, d’fhulaing Sionainn ó ghníomhaíochtaí
    North Atlantic but still had a very resilient outturn with      laghdaithe ar an Atlantach Thuaidh, ach mar sin féin, bhí
    passenger numbers slipping by just 2% to 2.35 million.          toradh an-mhaith ag an aerfort, le líon na bpaisinéirí ag
    Cork enjoyed a 6% rise in throughput to a record level of 1.9   caolú 2% díreach, go dtí 2.35 milliún. Bhí méadú 6% ag
    million passengers. The launch of new routes and services to    Corcaigh go leibhéal nár sáraíodh cheana, go dtí 1.9 milliún
    North America, Continental Europe and the UK continued to       paisinéir. Le tosnú bealach agus seirbhísí nua go Meiriceá
    expand the network of destinations served by the Group’s        Thuaidh, Mór-Rionn na hEopra agus an Ríocht Aontaithe, tá
    three airports.                                                 gréasán na gceannscríbe atá ar sceideal trí aerfort an
8                                                                   Ghrúpa, ag méadú i gcónaí.
    Infrastructural Development
    In line with its statutory obligations under the Air            Forbairt Bhoinneagair
    Navigation and Transport (Amendment) Act, 1998,                 De réir a oibleagáidí faoi Acht Aerloingseoireachta agus
    Aer Rianta continues to plan for and invest in the              Aeriompar (Leasú) 1998, tá Aer Rianta ag leanúint leis an
    infrastructure needed to meet anticipated traffic growth        pleanáil agus infheistíocht atá gá le, chun an méadú sa
    at its three Irish airports.                                    trácht atáthar ag súil le ag a thrí aerfoirt Éireannacha,
                                                                    a shásamh.
    On a broader time frame and based on current projections,
    passenger traffic through Dublin Airport is likely to exceed    Ar chlár-ama níos leithne agus de réir meastachán an lae
    20 million within the next six years and may reach over 30      inniu, tá súil go mbeidh trácht trí Aerfort Átha Cliath níos
    million by 2020. With this in view, Aer Rianta and a team of    mó ná 20 milliún laistigh de sé bliana agus seans ann go
    international consultants have engaged in a detailed            sárófar 30 milliún faoi 2020. Agus an dearcadh seo ar an
    master-planning process to determine the optimum                scéal, tá Aer Rianta agus foireann de chomhairleoirí
    facilities and the capital expenditure requirements to meet     idirnáisiúnta páirteach i mionphróiseas maidir le
    this projected expansion. This programme, scheduled for         príomhphleananna chun socrú a dhéanamh ar na háiseanna
    completion shortly, has examined specific proposals for         is fearr agus an caiteachas caipitiúil is gá chun freastal ar
    terminal, pier, cargo and runway facilities. It has also        an leathnú seo. Tá tairiscintí faoi leith i gcomhair fóntas
    assessed the best internal transportation and terminus          críochfoirt, piara, lasta agus rúidbhealaigh iniúchta ag an
    options for integration with the planned rail link from the     clár seo, atá le críochnú go gairid. Tá na roghanna is fearr
    city centre.                                                    maidir le hiompar inmheánach agus ceann cúrsa don naisc
                                                                    treanach atá beartaithe ón chathair iniúchta aige freisin.
    The additional passengers will generate significantly
    increased aircraft movements at Dublin Airport. To best         Beidh a thuilleadh gluaiseachtaí aerárthaigh ag Aerfort Átha
    cater for this traffic, Aer Rianta and its advisers have        Cliath de bharr na bpaisinéirí sa bhreis. Chun freastal ar
    concluded that the construction of a proposed new parallel      an dóigh is fearr ar an trácht seo, tá sé socraithe ag
    runway to the north of the existing main runway, 10/28,         Aer Rianta agus a chomhairleoirí go mbeidh gá le
    will be required within the next five to six years.             rúidbhealach comhtreomhar nua atá beartaithe ó thuaidh
                                                                    ón phríomhrúidbhealach 10/28, laistigh de cúig nó sé
                                                                    de bhlianta.
Major transport infrastructure projects of this kind            De ghnáth, tá próiseas pleanála fada ag dul le scéimeanna
normally involve a protracted planning process. To set the      móra iompair bonneagair den tsaghas seo.
process in motion, Aer Rianta hosted a public exhibition        Dá bhrí sin agus chun an próiseas a thosnú, d’eagraigh
last year in tandem with the framing of an Environmental        Aer Rianta anuraidh taispeántas poiblí in éineacht le
Impact Statement (EIS) and has launched a comprehensive         ceapadh Ráitis Tionchair Chomhshaoil (EIS), agus tá clár
advisory programme with neighbouring communities and            comhairleach cuimsitheach tosnaithe acu le pobail
their representatives in North County Dublin. The company       comharsan agus a n-ionadaithe i dtuaisceart Co. Átha
plans to submit a planning application for a new runway         Cliath. Tá sé ar intinn ag an cuideachta iarratas pleanála le
during 2003.                                                    hagaidh rúidbhealaigh nua a chur isteach i 2003.

At Cork Airport, detailed plans for a new passenger terminal    Cuireadh críoch le mionphleananna i gcomhair críochfoirt
were finalised in the first months of 2003. This followed a     paisinéirí nua ag Aerfort Chorcaí ins na chéad míonna de
tendering process, which encountered some unavoidable           2003. Tharla seo tar éis mionphróisis tairisceana; bhí roinnt
delays due to the scale and complexity of the contract          moill dosheachanta ag baint leis an bpróiseas de bharr
involved. Work on the facility and its support infrastructure   méide agus castachta an chonartha i gceist. Déanfar tosnú
will begin shortly. The new terminal is scheduled to open in    le gairid ar an fóntas agus an bonneagar a ghabhann leis.
early 2005 and will provide a major boost to the economy        Tá sé beartaithe go n-osclófar an críochfort nua go luath i
of the city and surrounding counties.                           2005, agus tabharfaidh seo spreagadh mór do
                                                                eacnamaíocht na cathrach agus na gcontaetha márguaird.
Aviation Regulation
In December 2001, Aer Rianta received leave to apply to         Rialú Eitlíochta
the High Court for judicial review of the Determination         I Mí na Nollag 2001 fuair Aer Rianta cead dul go dtí an
made by the Commission for Aviation Regulation,                 Ardchúirt le haghaidh athbhreithnithe dlíthiúil ar an
in respect of the maximum level of airport charges that         Chinneadh a bhí déanta ag an Coimisiún um Rialú Eitlíochta
may be levied by the company at Dublin, Shannon and             maidir leis an t-uasleibhéal de tháille aerfort gur féidir
Cork airports.                                                  leis an chuideachta a ghearradh ag Aerfoirt Átha Cliath,
                                                                na Sionainne agus Chorcaí.                                         9
In April 2003, the High Court delivered its judgement on the
substantive issue underlying this review. This centres on       In Aibreán 2003 d’fhógair an Ardchúirt a breith ar an cheist
the company’s statutory role vis-à-vis that of the Regulator    ábhartha faoin athbhreithniú seo. Baineann seo le páirt
in determining the scale and nature of capital development      reachtúil na cuideachta i gcomparáid le páirt an rialóra
at the airports and the extent to which that expenditure can    maidir le cinneadh ar an méid agus an cineál forbartha
be recovered by means of airport charges. The company is        caipitiúil atá ceadaithe ag na haerfoirt agus an méid den
carefully considering the judgement.                            caiteachas sin gur féidir a fháil thar nais trí tháillí aerfort.
                                                                Tá an bhreith á iniúchadh go géar ag an cuideachta.
     Special Olympics                                                Na hOilimpeacha Speisialta
     Aer Rianta is making special preparations to greet the          Tá ullmhúcháin speisialta á dhéanamh ag Aer Rianta chun
     athletes, coaches and families scheduled to attend the          fáilte a chur roimh lúthchleasaithe, traenálaithe agus clanna
     Special Olympics in Ireland in June 2003. The Group             a bhéas ag freastal ar na hOilimpeacha Speisialta in Éirinn i
     wishes the games every success and will ensure that the         Meitheamh 2003. Guíonn an Grúpa gach rath ar na cluichí
     arrival at and departure from our airports of these             agus déanfaidh sé deimhin de go mbeidh teacht agus
     treasured visitors will prove a pleasant and memorable          imeacht na gcuairteoirí ionúin seo ina taithí suntasach.
     experience. Aer Rianta was delighted to present a               Bhí an-áthas ar Aer Rianta síntúis bunúsach airgeadais a
10   significant financial contribution to the Special Olympics      bhronnadh ar Choiste na nOilimpeach Speisialta i 2002,
     Committee in 2002, while hundreds of the company’s staff        agus cuideoidh na céadta de fhoireann na cuideachta ar an
     will lend their practical support to the event by serving as    ócáid i Meitheamh. Tá earraí go bhfuil baint acu leis na
     volunteers in June. A Special Olympics shop, the first in the   cluichí á ndíol i siopa na nOilimpeach Speisialta, an chéad
     country, commenced selling games-related merchandise on         sa tír, ar an sráid siopadóireachta ag Aerfort Átha Cliath ó
     the Shopping Street at Dublin Airport in April.                 Mí an Aibreáin i leith.

     Corporate Governance                                            Modh Rialaithe Corparáideach
     The company continues to be committed to maintaining the        Tá sé de chúram ag an cuideachta i gcónaí na caighdeáin
     highest standards of corporate governance. It makes every       modh rialaithe corparáideach is airde a chleachtú.
     effort to deal with its customers, suppliers, staff, partners   Déanann sé gach iarracht le déileáil lena chustaiméirí,
     and local communities in an open and fair manner and            a sholáthraithe, a fhoireann, a pháirtnéirí agus le phobail
     respects the cultures and traditions of the countries in        áitiúla i slí atá oscailte agus cothrom, agus tugann sé aird
     which it operates. Further details as to the application of     ar chultúir agus traidisiúin na dtíortha ina bhfeidhmíonn sé.
     corporate governance principles are contained in the report     Tá a thuilleadh sonraí maidir le prionsabail modh rialaithe
     of the Board of Directors.                                      corparáideach le fáil i dtuarascáil an Bhoird Stiúrthóirí.

     Proposed Final Dividend                                         Díbhinn Chríochnaitheach Molta
     On 30 April 2003, subsequent to the approval by the             Ar 30 Aibreán 2003, tar eís glactha na ráiteas airgeadais ag
     directors of the financial statements, the directors            na stiúrthóirí, do mhol na stiúrthóirí díbhinn
     recommended the payment of a final dividend of                  chríochnaitheach de €0.04938c in aghaidh na gnáthscaire,
     €0.04938c per ordinary share to be approved by the              ach é a bheith ceadaithe ag na scairshealbhóirí ag cruinniú
     shareholders at the annual general meeting of the               bliantúil ginearálta na cuideachta. ‘Sé an turadh a bhéas ar
     company. This will result in a total final dividend payment     seo ná go mbeidh díbhinn chríochnaitheach de €7.245
     of €7.245 million reducing profit and loss account reserves     milliún san iomlán, laghdú €7.245 milliún ar chúlchiste
     carried forward at 31 December 2002 by €7.245 million.          sochair agus dochair tugtha ar aghaidh ag 31 Nollaig 2002.
Acknowledgements                                               Buíochas
I would like to thank the Minister for Transport,              Ba mhaith liom buíochas a ghabháil leis an Aire Iompair,
Séamus Brennan, T.D., and his predecessor, Senator             Séamus Ó Braonáin, TD, agus a réamhtheachtaí, an
Mary O’Rourke, for their professional support during the       Seanadóir, Máire Uí Ruairc, as a dtacaíocht gairmiúil i rith
year. The advice and assistance of the Secretary General       na bliana. Bhí meas mór againn ar an chomhairle agus an
of the Department of Transport, Julie O’Neill, and her         chabhair a fuarathas ó Ardrúnaí na Roinne Iompair,
predecessor Brendan Tuohy, were much appreciated.              Julie O’ Neill agus ó Brendan Touhy, Ardrúnaí na Roinne
The continuing support of Assistant Secretary, John            Fiontar Poiblí. Ba fhíorluachmhar arís an tacaíocht
Lumsden, and the staff of the Department of Transport,         leanúnach a fuarathas ón Rúnaí Cúnta, John Lumsden,
again proved invaluable. We would also like to express         agus ó fhoireann na Roinne Iompair. Ba mhaith linn freisin
our thanks to Tom Considine, Secretary General of              ár mbuíochas a ghabháil le Tom Considine, hArdrúnaí na
the Department of Finance, and his staff for their             Roinne Airgeadais, agus lena fhoireann as ucht a
continuing support.                                            dtacaíochta leanúnaigh.

I would like to thank my fellow Board members for their        Ba mhaith liom buíochas a ghabáil le chomhbhaill an
personal support and for their contribution to the continued   Bhoird as ucht a dtacaíochta dom go pearsanta agus a
success of the Aer Rianta Group. I would like to offer         bhfuil déanta acu ar mhaithe le rathúlacht leanúnach
special thanks to outgoing directors, Dermot O’Leary and       Ghrúpa Aer Rianta. Ba mhaith liom buíochas faoi leith
Tadhg O’Donoghue, who left the Board at the end of the         a ghabháil le stiúrthóirí, Dermot O’Leary agus Tadhg
year having completed their terms in office. My sincere        O’Donoghue, a d’eirigh as oifig ag deireadh na bliana ar
appreciation goes to Chief Executive John Burke, his           chríochnú a dtéarmaí. Gabhaim mo fhíorbhuíochas leis an
management team and all the staff across the Group,            bPríomhfheidhmeannach, John Burke, a fhoireann
for their commitment and hard work throughout what             bainisteoireachta agus foireann an Ghrúpa go léir as ucht a
proved a difficult year in many different respects. Their      ndíograise agus a ndianoibre i gcúrsaí deacra. Déanfaidh a
unremitting professionalism and expertise will ensure that     ndúthracht agus a n-oilteacht, atá gan stad, deimhin de go
the country’s three principal airports and Aer Rianta’s        leanfaidh trí príomhaerfoirt na tíre agus gníomhaíochta Aer
overseas interests will continue to develop to their true      Rianta thar lear ag forbairt chomh fada is a féidir leo ar     11
potential, to the ultimate benefit of the Irish economy and    deireadh thiar do thoradh eacnamaíochta na hÉireann agus
its travelling public.                                         an phobail taistil.




Noel Hanlon                                                    Nollaig Ó hAnluain
Chairman                                                       Cathaoirleach

30 April 2003                                                  30 Aibreán 2003
                                                                                                                            John Burke, Chief Executive


                           Accelerating change continued to be a key feature of the         Airport Development and Funding
Chief Executive’s Review




                           aviation industry in 2002, affecting both airports and           A crucial issue facing the company is that of ensuring the
                           airlines. In a broader context, continuing change was also a     infrastructural capacity of the airports continues to be
                           key feature of the Irish and international economy.              developed, in a timely way, to cater for expected growth in
                           Aer Rianta adapted effectively to these changes at both          passenger and cargo numbers and to meet the country’s
                           an operational and a strategic level. At the same time,          economic needs. Securing the necessary funding to
                           the company engaged actively with the Government and             discharge this statutory responsibility effectively presents
                           other stakeholders in relation to the significant policy         a major challenge for Aer Rianta.
                           initiatives affecting Aer Rianta, specifically the question of
                           giving greater autonomy to Cork and Shannon airports and         The funding issue is integrally linked to the level of charges   13
                           the question of a second, independently operated, terminal       which the company is permitted to set for airport
                           at Dublin Airport. Important also during the year were the       operations. Aer Rianta believes that the present level of
                           ongoing arrangements for the provision of additional fast        airport charges permitted by the Regulator, and the way in
                           turnaround facilities at Dublin Airport on a temporary basis     which that level is determined, does not allow sufficient
                           initially and subsquently on a permanent basis.                  investment to cater for the forecast growth in the number
                                                                                            of passengers and cargo that will use the airports. As the
                           Performance                                                      Group’s current and future streams of non-aviation
                           Group profit after tax and exceptional items amounted to         revenues have been taken fully into account by the
                           €36.2 million compared to €11.6 million in 2001.                 Regulator when setting his maximum airport charges,
                           However, last year’s result had an exceptional charge of         this income does not constitute an additional untapped
                           €23.4 million for restructuring costs and a voluntary            source of capital for investment in development of the
                           redundancy scheme. €96 million was invested in Group             airports. The company sought and was granted a judicial
                           infrastructure during the year.                                  review of the Regulator’s determination on airport charges.

                           This profit after tax was achieved through cost containment      The low level of charges at Dublin Airport has been
                           despite increases in business volume and significant             independently established. As reported last year, Professor
                           increased security, interest and insurance costs.                Rigas Doganis independently verified to the Department
                                                                                            of the Taoiseach that airport charges are among the lowest
                           Once again, practically all profits were generated by airport    in Europe compared with similar-sized airports. The
                           retailing, commercial activities and overseas businesses,        Assessment Panel established by the Minister for Transport
                           underlying the Group’s success in these areas, but also          to examine proposals for an independently operated
                           reflecting the continued low level of return from regulated      terminal at Dublin Airport has concluded that the level of
                           airport operations.                                              charges at Dublin Airport is low when compared with other
                                                                                            European airports.
     Indeed, the Panel reports that any new terminal may not be        Strategy and Change
     financially viable on the basis of the existing low level of      Aer Rianta continues to pursue its strategic goal to be
     charges and suggests that “increased, but realistic charges”      a premier Irish international airport owner and operator,
     would not affect the operational attractiveness of a new          meeting the needs and expectations of customers,
     facility for airlines.                                            using resources effectively, fully realising the
                                                                       capabilities and potential of staff and optimising long-
     The Group’s year-end level of net debt is €376 million.           term shareholder value.

14   Airport Planning                                                  Transformation and change within the company continues
     Plans for the future development of Cork and Shannon              apace. In cooperation with staff, new technologies and
     airports have been completed. A new terminal has been             more streamlined processes have been introduced, while a
     constructed and is fully operational at Shannon. Following a      voluntary early retirement programme saw the departure of
     comprehensive process, plans for a new terminal at Cork           215 staff during 2002.
     were drawn up. Tenders for the construction of the new
     terminal are now in the final stages of evaluation. Cork will     As part of our ongoing efforts to meet the sometimes
     have a new terminal by 2005.                                      differing needs of our various customers; - airlines, service
                                                                       providers and the travelling public, Aer Rianta has been
     A major master-planning process for Dublin Airport has            working to develop effective customer service agreements,
     been undertaken also. The results of this process will be an      which will enhance the experience of all those using our
     important input into the future development of the Airport.       airports. Also during the year a Passenger Services Council
     The public consultation process on the new proposed               was established for Dublin Airport.
     parallel runway at Dublin Airport began in November 2002.
                                                                       It is a significant challenge to maintain quality customer
     The provision of additional infrastructure needs to be            service standards in the context of continuously increasing
     provided in a timely manner to cater smoothly over time for       passenger numbers and a seriously constrained revenue
     the anticipated growth in passenger numbers and cargo             generating capacity, because of the current low level of
     traffic. Delays in making necessary investments will cause        charges which are allowed to the company.
     difficulties in the form of congestion and poor service to
     customers.                                                        Overseas
                                                                       Aer Rianta’s investments in Birmingham, Düsseldorf and
     Second only in importance perhaps, to the question of how         Hamburg airports performed well, given the global
     major infrastructural developments at the Airport are             downturn in the aviation industry. Aer Rianta International’s
     funded, is the issue of appropriate surface access transport      retailing operation was particularly strong in the CIS,
     and the urgent need to reduce the current dependence on           Ukraine and Middle East. During the year, a new nine-year
     an already pressurised road system. Aer Rianta continues          duty-free concession was secured at Seeb International
     to work closely with the bodies charged with developing           Airport in Muscat, Oman. In Canada, a new duty-free
     road and rail access to the Airport. The putting in place of a    concession began operating at Halifax Airport in
     rail link in particular, which is linked to the city centre and   March 2002.
     to the wider national transport network, is very important
     for the future development of Dublin Airport.
Great Southern Hotels                                            The final outcome of the Minister’s consideration of the
Great Southern Hotels (GSH) experienced a second                 question of a second terminal at Dublin Airport, operated
successive year of difficult trading conditions.                 independently of Aer Rianta, and the issue of greater
In line with national trends, hotel room capacity increased      autonomy for Cork and Shannon airports will clearly be
during the year, but growth in demand was slow.                  very significant for the company. It will of course be equally
The company continues to invest significantly in its             important in determining how, and by whom, airport
prime hotel properties.                                          infrastructure is provided in the future. Aer Rianta is
                                                                 participating fully in the consultative process initiated by the
A €15 million restoration and refurbishment programme            Minister and will provide advice based on its expertise and
was completed in the Killarney Great Southern Hotel in mid       experience. As continuing uncertainty for the company is
2002 while the €12 million extension to the hotel at Dublin      most undesirable, it is welcome that the Minister has
Airport opened in May 2002. Eyre Square has been                 undertaken to deal with these issues as quickly as possible.
refurbished at a cost of €8 million and has reopened as
Galway City’s premier hotel. In November 2002 the Board          I would like to pay tribute to management and staff
of GSH decided to close the Torc Hotel in Killarney, as          throughout the Group for their hard work and commitment
surplus to its business requirements, and to offer the site      during the year. They have delivered a strong performance
and premises for sale.                                           in sometimes trying and uncertain circumstances. I wish to
                                                                 thank our Chairman, Noel Hanlon, and the members of the
Outlook                                                          Board for their unstinting dedication, support and advice.
Aer Rianta continues to evolve to meet the rapidly expanding     I am confident that, jointly, we can meet any challenges that
demand for air travel, embracing business, leisure and tourist   come our way in the future.
traffic. Traffic growth has been phenomenal at the three
airports in the past decade and is forecast to grow strongly
over the next decades. The company is engaged in, or has
completed significant master-planning projects at Dublin,
Shannon and Cork to ensure that our airports will be well
placed to meet future traffic demand.                                                                                               15
                                                                 John Burke
Our overseas subsidiary, Aer Rianta International,               Chief Executive
is contributing significantly to the Group’s profitability.
Great Southern Hotels continues to invest in its hotels.         30 April 2003
                     Airport Management                                            The Dublin–UK market accounted for over half of the
Review of the Year




                                                                                   Airport’s total traffic in 2002. Passenger numbers in this
                                                                                   sector grew by 6% to 7.9 million. The second largest
                     In 2002, Dublin, Shannon and Cork airports worked
                                                                                   market – Europe – grew by 9% and surpassed the 5.6
                     successfully to attract new airlines, deliver more
                                                                                   million mark. The sector now comprises over one-third of
                     destinations and increase capacity on many routes.
                                                                                   Dublin’s business. Growth was strong in both the
                     The three airports catered for a total passenger throughput
                                                                                   scheduled and charter segments.
                     of 19.3 million passengers, up 4.3% on 2001. Over the
                     period 1995–2002, traffic has grown from 10.6 million to
                                                                                   Transatlantic traffic was down 15% due to the adverse
                     19.3 million – an increase of over 80%. Over 80 airlines
                                                                                   affects of 11 September 2001 and the slow-down in              17
                     serve over 130 routes to the UK, Europe and North America
                                                                                   economic activity. The numbers travelling on domestic
                     from the three airports.
                                                                                   flights out of Dublin remained at approximately 650,000.
                     On a typical busy day, Dublin Airport handles over 650
                     flights carrying up to 70,000 passengers – not far short of
                                                                                   Physical Development
                                                                                   The main terminal extension project was completed
                     an All Ireland Day crowd at Croke Park! No other airport in
                                                                                   and formally opened by An Taoiseach, Bertie Ahern T.D.,
                     the UK or Europe has this level of traffic and connections
                                                                                   in June 2002.
                     for a similar population size.

                                                                                   To facilitate the growing requirements of fast-turnaround
                     Reflecting the industry’s heightened concern with security,
                                                                                   airline operations at Dublin, planning approval was obtained
                     Aer Rianta ensures that its airports comply with
                                                                                   from Fingal County Council for a temporary Pier D facility
                     international security regulations and has put in place
                                                                                   to be in place for Summer 2003 and a permanent Pier D
                     100% hold baggage screening since 1 January 2003.
                                                                                   to be in operation by the following summer. An airline and
                     This means that all baggage that goes into the holds of
                                                                                   a residents’ organisation appealed both projects to An
                     aircraft at Dublin, Shannon and Cork airports is checked
                                                                                   Bord Pleanála. However, the permanent Pier D has now
                     by modern screening technology.
                                                                                   been approved.


                     Dublin Airport                                                          Total Passenger Numbers
                                                                                        20
                     Traffic Performance                                                                                       19.3
                                                                                                                       18.5
                     It was another record-breaking year for Dublin Airport,            18                     17.9
                     where passenger numbers climbed to 15.1 million in
                                                                                                       16.5
                     2002. This represents a 5% increase on 2001. Airlines              16
                     operating out of the airport served 74 scheduled and                      14.8
                     46 charter routes.
                                                                                        14

                     Air Canada launched summer services to Toronto; Aer
                                                                                        12
                     Lingus added seven services – some new for the Airport;
                     and Ryanair started flights to Aberdeen.
                                                                                        10
                                                                                              1998     1999    2000    2001     2002
     Passenger traffic through Dublin Airport is forecast to         London continued to be Shannon’s biggest market and
     double to over 30 million by 2020. Aer Rianta, with the         recorded modest growth.
     assistance of international consultants, is planning for the
     optimum facilities and the capital expenditure requirements     Transatlantic results were better than expected – despite the
     to meet this projected expansion. This programme,               loss of Delta Air Lines’ service to New York JFK and Aer
     scheduled for completion shortly, has examined specific         Lingus services to Newark and Baltimore-Washington.
     options for terminal, pier, cargo and runway facilities.        Traffic fell by 9% compared with 2001, but the surviving US
     It has also assessed the best internal transportation and       services delivered excellent load factors. The new Air
18   terminus options for integration with the planned rail link     Canada service to Toronto made a significant contribution
     from the city centre.                                           to the sector.

     The arrivals road was widened to substantially increase         Domestic traffic was down 26%, due mainly to the
     the space available for taxis and buses. A new coach park       withdrawal of the Aer Lingus commuter service. Aer Arann
     was completed to support the increasing volume of bus           Express started a twice-daily service to Dublin during the
     and coach services. A major extension to Air Traffic            year, but lack of support resulted in its termination in
     Control (ATC) facilities was completed for the Irish            December 2002.
     Aviation Authority.
                                                                     Transit traffic fell by 15% – a direct result of reduced
                                                                     transatlantic services and the decision by Royal Jordanian
     Shannon Airport                                                 to fly direct from New York to Amman.

     Traffic Performance                                             Physical Development
     The total number of passengers through Shannon in 2002          The company opened its new shared services centre at
     was 2.35 million – a drop of 2% on 2001. This was ahead         Shannon during the year. The purpose-built centre
     of expectations, particularly given the reduction of capacity   consolidates all the in-house financial services for Dublin,
     on transatlantic services.                                      Shannon and Cork airports and has led to major cost
                                                                     benefits and efficiencies.
     European traffic showed an increase of 36% on 2001, with
     both scheduled and charter operations delivering growth.        Aer Rianta completed a new maintenance hangar for one of
     The new SkyNet service to Amsterdam and Ryanair flights         its bigger cargo customers at Shannon – United Parcels
     to Paris both contributed to an upbeat performance in the       Service (UPS).
     European sector.
                                                                     In an effort to improve customer service and streamline the
     Traffic on UK routes fell by 2%, due to the loss of Belfast     information operation at Shannon, a new information desk
     and London Gatwick services, as well as reduced frequency       and centre opened in the arrivals hall. Investment in 100%
     on the Manchester route.                                        hold baggage screening was completed during the year.
                                                                     Airside pavement repairs were also undertaken and new
                                                                     floodlighting was installed on the east and south-east aprons.
Cork Airport                                                   Physical Development
                                                               Cork Airport will be transformed with a brand new terminal
Traffic Performance                                            and other facilities. During 2002 there was intense activity
Cork Airport’s growth momentum produced another traffic        to put in place all the arrangements for the commencement
record. Passenger figures for the Airport grew to almost 1.9   of the construction of the terminal. Work on the facility and
million – an increase of 5.6% over 2001.                       its support infrastructure will begin shortly and the terminal
                                                               will be ready for 2005.
The strongest growth was on UK routes – passenger
numbers travelling to London Stansted were up 29% on           Cork’s €8 million apron extension and new taxiway project
2001. UK provincial traffic grew by 10%, spurred on by the     was completed midway through 2002. This has provided
launch of new services by Aer Arann to Southampton,            more aircraft parking space and ensures that adequate
Edinburgh, Birmingham and Bristol. Other new services          capacity is available.
were introduced by Loganair to Glasgow, BMI to Leeds
Bradford and bmiBaby to East Midlands.                         Improvements were carried out to the long-term
                                                               overflow car park to provide greater comfort for users.
Cork extended its range of European scheduled and charter      In the terminal, additional space was provided to allow for
services, which proved a boon for business travellers and      peak-time passenger flow. The catering area has been
holidaymakers. A new scheduled Malaga service was              refurbished and offers a new range of services to
launched by Aer Lingus. New European holiday destinations      customers.
included Croatia, Cyprus and Morocco. As a result,
European passenger numbers grew by 16%. Domestic               Projects in the pipeline include the construction of a new
numbers fell by 11%, largely due to reduced frequency by       control tower for the Irish Aviation Authority on the western
Aer Lingus on the Dublin route. Its replacement by Aer         side of the airfield. A proposal to re-zone a 40-acre site on
Arann, using smaller aircraft, resulted in reduced capacity.   the Kinsale Road was submitted for inclusion in the five-
                                                               year revision of the County Cork Development Plan.
The level of enquiries and new contacts remains strong at
                                                                                                                                19
Cork, with convincing indications of new services to come.
A new airline, Jet Magic, commenced services to Belfast
and Brussels and Czech Airlines commenced a new service
to Prague, in April 2003.
     Environment                                                  Community Relations
     Aer Rianta seeks to ensure that operations at its airports   In 2002, many public information meetings were held with
     are carried out to high environmental standards.             representatives from the local communities around our
                                                                  airports. This is an important part of our commitment to
     Our environmental mission is: ‘To develop and operate a      keeping everybody well informed about proposed
     sustainable business in compliance with regulatory           developments. It also allows our neighbours a forum for
     requirements, best management practices, and with            discussion on any elements of our operations which may
20
     sensitivity to local community and public concerns.’         cause them inconvenience or concern.

     Aer Rianta’s key environmental objectives are to:            To secure the long-term development of Dublin Airport,
     •    Maintain high and stable levels of economic             it has long been recognised that a proposed parallel
          growth and employment                                   runway will be required on the northern side of the airfield.
     •    Achieve social progress that recognises                 Aer Rianta hosted a three-week public consultation on the
          everyone’s needs                                        environmental impact assessment, which was attended by
     •    Provide effective protection of the environment         many representatives from local communities. This
                                                                  consultation is part of an on-going process to ensure that
     For Aer Rianta, sustainability means balancing these three   any development at Dublin Airport should cause the least
     objectives. Like many other organisations, we cannot         possible environmental impact on local communities.
     achieve sustainability in isolation from the economy and
     society we serve.                                            The year under review saw the introduction of some
                                                                  changes to the operating procedures for aircraft arriving
     Each of our three airports is developing environmental       into, and departing from, Dublin Airport. These changes
     management plans and systems specific to their needs.        were identified using the new ‘Noise & Flight Track
     Monitoring the environmental impacts of our airport          Monitoring System’. As a result, the number of aircraft
     systems on air and water quality continues. In addition,     now over-flying local communities has been significantly
     the minimisation and management of waste is the subject      reduced. This is an on-going process where continuing
     of increasing emphasis. Processes are now in place which     benefits will be identified and introduced over the
     greatly increase the amount of material being recycled.      coming years.
     Again, this is an on-going process and will remain one of
     our prime objectives.                                        At Shannon and Cork, consultations with local residents
                                                                  continued. Meetings were held on a regular basis with the
                                                                  local Chambers of Commerce, Cork Airport Consultative
                                                                  Committee, Shannon Airport Marketing Consultative
                                                                  Committee, local authorities and representative bodies.
Safety                                                         Passengers now have a voice to articulate their views on
                                                               service standards and how they can be improved.
                                                               A voluntary service level agreement has been put in place
Aer Rianta assesses and manages risks using best safety
                                                               between Aer Rianta and the Airline Operators Committee.
management systems. In order to maintain systems and
                                                               This agreement comprises inter-alia minimum standards in
practices at the highest levels, the company works closely
                                                               respect of check-in, baggage delivery, security search
with all regulatory bodies, including the Health & Safety
                                                               queuing, trolley availability and baggage equipment
Authority, the Irish Aviation Authority (IAA) and the local
                                                               serviceability. This service level agreement is another
authorities. Performance is reviewed on a regular basis by a
                                                               important step in further improving service standards at
board sub-committee. The safety statement required under
                                                               Dublin Airport.
‘Health & Safety at Work’ legislation has been re-issued and
reiterates our commitment to safe work practices
                                                               At Shannon, there is a renewed focus on delivering
throughout the Group. The IAA, which regulates aviation
                                                               improved customer service and efficiency. In order to
standards at Dublin, Shannon and Cork, has confirmed our
                                                               ensure a quality service to customers, Aer Rianta has taken
licences to operate for 2003. In addition, it has
                                                               over the responsibility for aircraft stand planning and
independently audited one of our airports in the year under
                                                               allocation, baggage carousels and trolley collection.
review and has confirmed Aer Rianta’s compliance with
                                                               This has led to a significant improvement in services.
licensing requirements.

                                                               Cork Airport was voted the ‘Best Irish Airport’ for 2002 by
Customer Service                                               the Air Transport Users Committee of the Chambers of
                                                               Commerce in Ireland. Feedback indicated that customer
                                                               service was a major factor in this decision to recognise
Aer Rianta has established a ‘Passenger Services Council’
                                                               Cork Airport. Cork is implementing a range of
at Dublin Airport to provide passengers with a forum on
                                                               improvements in the existing terminal - mainly aimed at
service standards. The prime objective of the Council is to
                                                               creating more space in congested areas. Numerous
promote continuous improvement in passenger service
                                                               meetings were held with the Airport Consultative Committee
levels at Dublin. It provides an effective forum for
                                                               during the year.                                              21
discussing all matters relating to services at the Airport;
how these impact on passengers and on the people
accompanying or meeting them, as well as other visitors.
Airport Retailing




                    Airport retailing is a core business for Aer Rianta’s Irish       Shannon Duty Free and Travel Value shops enjoyed strong
                    airports. In addition to meeting the needs and expectations       sales in 2002, despite the reduced number of American
                    of customers, the sector contributes significantly to Group       visitors. Book sales were particularly strong. The perfume
                    profits. In 2002, total retail sales activity at the three        and cosmetic store will be completely refurbished early in
                    airports, including that of concessionaires, was ahead            2003. Landside, the Londis store and other retail outlets in
                    of 2001.                                                          the main terminal traded well and further units are planned.
                                                                                      Sales of food and, in particular meat products, recovered
                    The company continues to follow a twin-track strategy for         strongly in the second half of the year, following the
                    its airport retailing business. It offers duty and tax-free       complete removal of restrictions on the importation of such
                    shopping for non-EU travellers, while for those travelling        products for US-bound travellers.                               23
                    within Ireland and the EU it has developed ‘Travel Value’
                    outlets. These offer top quality national and international       Trading was strong at the Travel Value store at Cork Airport,
                    brands at special value for all passengers. In parallel, the      helped by very good book and music sales that came on
                    strategy seeks to provide passengers with the widest              stream during the year. Perfume and cosmetics sales
                    possible choice of branded retail and food/beverage outlets.      performed well, as did the souvenir product ranges. Plans
                                                                                      are in place to add new jewellery and watch offers during
                    In line with the desire to use its resources effectively, work    2003. Detailed planning work has begun on the retail and
                    continued during the year to exploit the full potential of the    catering facilities for Cork’s new terminal.
                    new SAP retail information system, with new modules
                    being brought on-line in 2002.                                    Airport Catering
                                                                                      Meeting the food and beverage requirements of passengers
                    The Aer Rianta Irish airport retail outlets were among the        represents a major business at Aer Rianta airports and is
                    first shops in the country to introduce people to the euro        operated through concessions at Dublin and Cork, and
                    on New Year’s Day 2002 and over the following weeks the           directly by Aer Rianta at Shannon. Concessionaire food and
                    changeover to the new currency was successfully managed.          beverage units traded strongly with overall sales running
                                                                                      ahead of 2001.
                    The ‘Street’ is Dublin Airport’s premier shopping
                    thoroughfare. It had a highly successful first full year          At Dublin Airport, construction started on the next phase
                    of trading in 2002. The ‘Street’ offers a total of 24 different   of development on the mezzanine floor. The first of the new
                    shops, including the Bailey Bar and the first airport-            catering facilities, Bewley’s Express, opened early in 2003
                    based Butler’s Chocolate Café. Among the new outlets to           to be followed by a new Food Court, which includes the
                    open during the year were the Guinness store – the first          first airport based ‘Nude’ gourmet fast food outlet.
                    of its kind at an airport – and SOAR, a new jewellery,            The development will be completed with the opening of a
                    watch and fashion accessory shop, selling leading                 new full-service brasserie restaurant and a suite of fully-
                    international brands.                                             fitted meeting rooms in early summer 2003.

                    Reflecting the company’s desire to be the ‘Best in its Class’,    At Cork Airport, food and beverage facilities have been
                    Aer Rianta’s pursuit of excellence led to the prestigious         fully refurbished and a new Café Cuisine coffee outlet
                    ‘Frontier’ Highly Commended award for the Butler’s                opened in 2002.
                    Chocolate Café development on Dublin Airport’s ‘Street’.
                    The award was made at the travel retail industry’s trade
                    awards in France to both Aer Rianta and the Irish
                    Chocolate Company.
Aer Rianta International




                           Aer Rianta, through its wholly owned subsidiary, Aer Rianta
                                                                                           Overseas Retailing
                           International cpt (ARI) is a major global player in airport
                                                                                           ARI-associated companies in Moscow and St. Petersburg in
                           ownership and duty-free retailing. Headquartered in
                                                                                           Russia, together with Kiev in Ukraine, had another successful
                           Shannon, it has regional offices in Bahrain and Canada.
                                                                                           year. Each location enjoyed an increase in turnover, which
                           Its business covers 20 operations in 14 different countries.
                                                                                           enhanced the financial performance of the region.
                           ARI consolidated its position in 2002 when it recorded a
                           profit after tax of €13.2 million.
                                                                                           In the Middle East, ARI, through its associate company Aer
                                                                                           Rianta International (Middle East) W.L.L. (ARIME), secured a
                           Overseas Airports                                               new nine-year duty-free concession at Seeb International
                           Birmingham International Airport handled 8 million                                                                                    25
                                                                                           Airport in Muscat, Oman. The operation opened for business
                           passengers in 2002, an increase of 2.8% over 2001.
                                                                                           on 1 February 2003. ARIME produced record results during
                           The Airport is well positioned to achieve further growth.
                                                                                           the period, with the new departures shop at Bahrain Duty
                           2003 will see the opening of the rail link between the
                                                                                           Free contributing to this success. The improved performance
                           Airport and the main line train station and of the Multi
                                                                                           was achieved despite the downturn in aviation business
                           Model Interchange. Surface access to the Airport will
                                                                                           resulting from 11 September 2001, which continued to have
                           be improved significantly as a consequence.
                                                                                           a negative impact on passenger numbers in the Middle East.
                                                                                           The recent hostilities in Iraq also resulted in a decline in retail
                           Düsseldorf International Airport handled 14.7 million
                                                                                           sales. However, there are encouraging signs of recovery.
                           passengers in the year under review, down 4.3% on 2001,
                           reflecting more difficult trading conditions. Growth in
                                                                                           Our subsidiary in Canada, Aer Rianta International (North
                           passenger numbers is expected to return in 2003, reflecting
                                                                                           America) Inc., experienced the immediate effects of the
                           the improved market conditions of the latter part of 2002,
                                                                                           events of 11 September 2001. Passenger numbers fell
                           though any international instability could limit the expected
                                                                                           significantly in the initial months and recovered gradually
                           growth. The people mover link between the Airport and the
                                                                                           throughout 2002. The financial performance of the
                           main railway station was opened in July 2002 and Pier C,
                                                                                           subsidiary has improved in line with the return to normal
                           the final part of the terminal development project “Airport
                                                                                           passenger levels. The new duty-free concession at Halifax
                           2000 plus”, is due to open in May 2003.
                                                                                           Airport opened in March 2002 and has made an
                                                                                           encouraging start. Aer Rianta International intends to
                           Hamburg Airport handled 8.9 million passengers in 2002,
                                                                                           pursue additional Canadian and North American
                           down 5.7% on 2001. This position is expected to be
                                                                                           opportunities that fit our investment profile.
                           reversed in 2003. Planning and design work for the new
                           Terminal “T2” has commenced and it is expected to open
                                                                                           Outlook
                           in 2005 increasing capacity to a projected 20 million
                                                                                           The travel retail industry continues to experience
                           passengers per annum.
                                                                                           challenging times. Aer Rianta, however, sees opportunities
                                                                                           for investment within existing operations and the market
                                                                                           at large.

                                                                                           Our international subsidiary will continue to invest in
                                                                                           attractive proposals that will add value to the existing
                                                                                           profitable retail businesses.
                        Great Southern Hotels has been one of Ireland’s premier          Great Southern Hotels continued its investment programme
Great Southern Hotels




                        hotel groups since 1845. During that time, it has                with a €15 million restoration and refurbishment
                        established a unique tradition of service to its guests.         programme in the Killarney Great Southern Hotel. It can
                        The company owns eight hotels and has a 25%                      now justifiably claim to be Killarney’s leading conference,
                        shareholding in the four-star City Hotel Derry, which it         incentive and leisure hotel. The three-star Torc Great
                        manages. Derry’s premier hotel opened in August 2002.            Southern Hotel in Killarney was closed following a review of
                                                                                         the group’s Kerry portfolio. Plans for the further
                        A second successive year of difficult trading conditions for     development of the Great Southern Hotel at Parknasilla are      27
                        Irish tourism generally, and for the hotel sector in             well advanced.
                        particular, saw Great Southern Hotels’ operating profit
                        before exceptional items, interest and taxation fall by 45%      The €12 million extension to the hotel at Dublin Airport
                        in 2002 to €1.8 million. Group profit after tax increased to     was opened in May 2002. The Eyre Square property in
                        €3.93 million, reflecting the net impact of exceptional items    Galway reopened in April 2003 after an €8 million
                        after tax.                                                       refurbishment and restoration project.

                        Hotel room capacity increased during the year, but growth        It is anticipated that 2003 will be another difficult year
                        in demand failed to materialise. As a result, occupancy          for the hotel sector. The focus will be on controlling costs,
                        levels fell. In the absence of growth in key overseas            maintaining market share and maximising the return
                        markets, operators offered discounted rates to attract           on investment.
                        domestic business. This, in turn, affected revenue and
                        yield. Yield was affected, also, by increased operating costs,
                        especially in payroll and insurance. The closure of the
                        Killarney and Galway hotels for refurbishment for a
                        combined total of seven months during the year had a
                        negative impact on sales and operating costs.
Human Resources




                  In pursuing the company’s strategic objectives, Aer Rianta      A significant number of staff also receive valuable support
                  continues to encourage staff to fully realise their             in obtaining professional qualifications through our ‘Career
                  capabilities and potential. It supports this through a range    Support Scheme’. An equality review commenced in the
                  of initiatives, policies and practices and a commitment to      last quarter of 2002. The review is supported and
                  work in partnership with employees and their                    implemented by the Equality Authority on behalf of the
                  representatives. Our human resource strategy supports           Department of Justice, Equality & Law Reform. It will
                  these aims through a framework of company-wide policies         provide a comprehensive review of current policies,
                  and practices aimed at assisting staff in developing their      practices, procedures, and perceptions of equality and
                  skills and protecting them in carrying out their daily work.    diversity in Aer Rianta and an agreed action plan to address
                                                                                  any areas requiring attention.
                                                                                                                                                 29
                  In a challenging year for the company, substantial progress
                  was made on a number of fronts. Certain key businesses          Employee Assistance Programme
                  and functions were restructured, which facilitated major        The company operates an employee assistance programme
                  changes across the company. Part of this change process         across the Group through which staff can avail of a
                  was a voluntary severance programme which formally              confidential advisory, counselling and referral service.
                  opened in January 2002. Over 200 staff took up the offer to     The Employee Assistance unit took many initiatives
                  exit the company.                                               throughout the year aimed at improving staff well-being,
                                                                                  including health screening and a programme to help
                  In its dedication to ‘use resources effectively’ and to ‘meet   smokers give up the habit.
                  the needs and expectations of customers’, Aer Rianta made
                  a major strategic investment in Oracle technology systems       Payroll
                  in 2002. A new Oracle HR system went ‘live’ in September        Group payroll costs for 2002 amounted to €142.6 million,
                  which marks the beginning of a new technological era for        an increase of 5.8% on 2001. This included employer
                  Human Resources. The company remains strongly                   contributions of €18.4 million for social welfare and
                  committed to working in partnership with its staff and to       superannuation. The final phases of PPF 2000 were paid
                  the continuing development of appropriate structures and        throughout the year and are included in these figures.
                  processes for this purpose.
                                                                                  Employment
                  Our approach to ‘Performance Management’ was reviewed.          In 2002, the Aer Rianta Group employed 3,431 staff (full-
                  A new process was developed in consultation with unions         time equivalent) compared with 3,438 in 2001. Over 80
                  and their representatives. A series of training programmes      additional security staff were recruited in 2002 as a result
                  was initiated for managers, with the objective of reinforcing   of changes in worldwide aviation security. The figure also
                  the process in the context of the continuing restructuring of   includes 117 staff from Kievrianta, which is now a wholly
                  the company.                                                    owned subsidiary of Aer Rianta. However, significant
                                                                                  savings in cost were achieved through the departure of
                  Training & Development                                          over 200 staff as part of the voluntary severance and
                  Investment in staff learning and development continues to       restructuring that has occured across the company.
                  be a priority for Aer Rianta, and helps in gaining vital
                  competitive advantage. The main training priorities in 2002     The breakdown of the average (FTE) staff numbers for
                  were: information technology; airside safety; customer          2002 was:
                  service and performance management. In addition,
                  individual career coaching was used to maximise staff           Airports                     2,416
                  potential and as a result contributed significantly to          Hotels                         708
                  improved performance during 2002.                               International                  307
                                                                                  Total                        3,431
Ancillary Activities




                       Property
                       The performance of the two property joint ventures
                       continued to record good progress in 2002, contributing
                       profits and increased value to the Group. In line with Aer
                       Rianta’s core value of meeting the needs and expectations
                       of customers and optimising long-term shareholder value,         31
                       the company’s 50/50 joint venture company with Dunloe
                       Ewart plc. is developing the Horizon Business Park at Dublin
                       Airport. Omnistone, in which Aer Rianta has a 25%
                       shareholding, is continuing to develop the Cork Airport
                       Business Park.

                       Shannon Aviation Fuels
                       Shannon Aviation Fuels (SAF), a division of Aer Rianta
                       operates at Shannon Airport. For over 20 years SAF
                       has been involved in the storage, handling and sale of
                       aviation fuel.

                       Shannon College of Hotel Management
                       The Shannon College of Hotel Management is a recognised
                       college of the National University of Ireland (NUI). It offers
                       an NUI Degree in Hotel Management and qualifying
                       students are eligible for free third-level fees and higher
                       education grants.
Financial Review




                   Group Financial Highlights                                        Total turnover from airport charges increased by just over
                                                                                     2% equivalent to about one half of the level of passenger
                                                                2002       2001      growth. Overall airport charges per passenger fell some 2%
                                                                €'m        €'m       to €5.55, a real reduction of over 6.4%. At Dublin, airport
                                                                                     charges per passenger reduced by some 10.7%
                   Passengers (millions)                        19.3       18.5      in real terms; total turnover from airport charges also fell
                   Turnover                                    420.9      438.3      despite over 5% passenger growth. This reflected the
                   Group profit before exceptionals             75.9       67.2      impact of the regulatory cap introduced in 2001 by the
                   Net exceptional items (after tax)             5.3      (19.2)
                                                                                     Commission for Aviation Regulation.
                   Group profit for the year                    36.2       11.6
                                                                                                                                                     33
                   Balance Sheet                                                     Cost of goods for resale decreased by 16% while other
                      Gross assets                           1,045.2       927.3     operating costs increased by 5.4% over 2001 levels.
                      Shareholders' funds                      403.3       372.2     The Group’s share of operating profits from associates and
                      Cash balances                             96.9        45.3     joint ventures increased by almost 70% to €42.6 million.
                      Net borrowings                           375.8       320.6     Group profit before exceptional items, interest and tax, was
                                                                                     €75.9 million, an increase of 13% from €67.2 million the
                                                                                     previous year.
                   Group Results
                                                                                     Exceptional profits of €5.3 million (after tax) arose in 2002
                   Passenger numbers at the three airports increased
                                                                                     on sales of land. The 2001 results reflected a net
                   by 4.3% last year. Dublin Airport was one of the three
                                                                                     exceptional charge (after tax) of €19.2 million (including
                   highest growth airports in Europe and one of only seven
                                                                                     €23.4 million for a major restructuring programme).
                   of the top twenty European airports to report annualised
                   growth in the year ending October 2002. Given that the
                                                                                     Group net interest charge (excluding associates/joint
                   period in question came in the immediate aftermath of the
                                                                                     ventures) increased by €3.5 million to €21.4 million
                   September 11th attacks in the US, this represented a very
                                                                                     arising from funding of the Group’s capital investment
                   satisfactory achievement.
                                                                                     programme at the three airports. The Group’s share of net
                                                                                     interest cost of associates and joint ventures rose to
                   Group turnover in 2002 was €420.9 million, 4% lower than
                                                                                     €11.5 million.
                   in the previous year reflecting a fall in turnover at Shannon
                   Airport, in particular in fuel sales. Turnover increased in all
                                                                                     As a result of the profit growth, the taxation charge
                   of the other Group’s main business entities despite less
                                                                                     increased to €14.2 million, from €6.6 million in 2001.
                   buoyant trading conditions.
                                                                                     Taking into account the different corporation tax rates
                                                                                     applicable across the Group and associates, both
                   Airport charges continue to be very low by comparison with
                                                                                     domestically and internationally, the effective tax rate in
                   international airports and comprise a disproportionately low
                                                                                     2002 was 28% (2001: 36%).
                   percentage of turnover: equivalent to about one quarter of
                   Group turnover.
                                                                                     Group profit for the year after tax and exceptional items
                                                                                     was €36.2 million, up from €11.6 million in 2001.
                          Group Turnover                                                   Group EBITDA


                €500                                                           €100

                €450                            €438                            €90
                                        €425           €421                                             €85

                €400                                                            €80      €78
                                 €372
                                                                                                 €72           €73
                €350                                                            €70                                   €70
                          €338


                €300                                                            €60

                €250                                                            €50
                          1998   1999    2000   2001   2002                               1998   1999   2000   2001   2002




     Subsidiary and Associated Undertakings                         Cash outflows in respect of the Group’s fundamental
     Subsidiary and associated undertakings continued to be an      restructuring programme amounted to €18.7 million in
     important contributor to Group profitability. These            2002 (2001: €nil). Group cash investment in fixed asset
     principally comprise Aer Rianta International (international   infrastructure was some €95 million (2001: €115 million).
     airport retailing and airport investments), the Great          Other capital items, including financial investments,
     Southern Hotels Group and property ventures.                   acquisitions and disposals gave rise to cash inflows of
                                                                    €13.3 million (2001: cash outflows of €12.2 million).
     Aer Rianta International reported profit after tax and
     exceptional items of €13.2 million, almost unchanged on        Group net debt increased to €376 million, up €55 million
34   2001. Great Southern Hotels reported profit after tax and      on 2001 levels. Cash balances were €96.9 million at year-
     exceptional items in 2002 of €3.9 million – an increase of     end (2001: €45.3 million).
     over 20% over the previous year. The Group’s share of
     profits from property ventures increased by nearly 75% in      During the course of the year the Group drew down a
     2002 to €3.1 million despite a slower property market.         long-term loan of €125 million from the European
                                                                    Investment Bank.
     Balance Sheet
     Shareholders’ funds increased by 8% to €403.3 million          Gearing (measured by expressing net debt as a percentage
     (2001: €372.2 million).                                        of the aggregate of net debt and ordinary shareholders’
                                                                    funds) increased to 48% by year-end (2001: 46%). Group
     Gross assets passed the €1 billion mark, increasing by         interest cover was 3.3 times (2001: 4.0 times) based on
     13% to €1,045 million. Fixed assets have increased from        Group EBITDA divided by the Group net interest charge.
     €395 million to €892 million over the past five years, an      Net debt rose to 5.4 times Group EBITDA (2001: 4.4 times).
     increase of 125%.                                              Details of debt maturity, un-drawn facilities and interest rate
                                                                    management are set out below.
     Cashflow & Funding
     Net cash inflow from operating activities was €63.3 million    The Group has a credit rating from Standard & Poor’s
     (2001: €82.9 million).                                         (S&P) of A+/Negative/A-1 on a stand-alone credit quality
                                                                    basis. The senior unsecured €250 million bond issued by
                                                                    Aer Rianta Finance plc, and guaranteed by Aer Rianta cpt,
                                                                    has a rating of A+.
                      Group Net Debt                                Cash Investment in Tangible Fixed Assets


     €500                                                             €150
                                                                                       €132
     €400                                                             €125
                                                €376                                                    €115
                                       €321                           €100                                      €95
                                                                                               €94
     €300                                                                      €84
                               €266
                                                                       €75
                        €208
     €200
                                                                       €50
               €132
     €100
                                                                       €25

        €0                                                               0
               1998     1999    2000    2001    2002                           1998    1999     2000    2001    2002




S&P altered their ratings outlook from positive to negative    Foreign Exchange Risk Management
in October 2002 reflecting the expected financial profile      The Group’s Irish businesses are predominately euro
following the Commission for Aviation Regulation’s first       denominated. The Group does not carry foreign currency
Determination on airport charges.                              exposures other than in the normal course of business.
                                                               Where they do arise, the Group’s policy is to minimise
Treasury                                                       currency transaction risk, by seeking to hedge foreign
The main risks arising from the Group’s financial              exchange transaction exposures that might impact on
instruments are liquidity risk, interest rate risk, foreign    reported profit. The Group operates a US dollar based
currency risk and credit risk. The Board reviews and agrees    aviation fuel business at Shannon. This fuel business is
policies for managing each of these risks and they are         conducted so as to minimise exposure to movements in the      35
summarised below.                                              euro/US dollar exchange rate and fuel price movements, for
                                                               example by denominating both fuel sales and purchases in
On occasion, the Group utilises derivatives to eliminate or    US dollars. Currency exposures are disclosed in note 25.
reduce foreign exchange and interest rate risks arising from
the Group’s operations and its sources of finance.             The Group has a number of overseas subsidiary and
                                                               associated undertakings, as set out in note 11 of the
Liquidity Risk                                                 financial statements. The principal foreign exchange
The Group’s policy is to ensure continuity of funding with a   exposures arising from these investments are in sterling,
substantial portion of borrowings maturing in more than        US dollars and Canadian dollars. Exchange differences on
five years. Some 80% of the Group’s borrowings at the end      translation of overseas investments are dealt with in the
of 2002 were due to mature in more than five years.            Statement of Total Recognised Gains and Losses. The
Un-drawn committed facilities were €79 million at the          Group’s policy is to hedge identified transaction exposures
year-end.                                                      arising from these undertakings (principally dividends and
                                                               management charges denominated in foreign currencies).
Interest Rate Risk
The Group has a substantial portion of its debt                Credit Risk
denominated as long-term fixed interest debt, thus             The Group’s credit risk consists principally of cash
minimising exposure to interest rate fluctuations. This        deposits, short-term investments and trade debtors. Cash
includes a €250 million Eurobond (2011) and a long-term        surpluses are only deposited with banks and institutions
€125 million loan from the European Investment Bank.           with an appropriate credit standing.
At the end of 2002, 85% of the Group’s borrowings were at
fixed rates at an average rate of 5.9%.
     ROUTE NETWORK
     DUBLIN AIRPORT
     SHANNON AIRPORT
     CORK AIRPORT




36
Aer Rianta cpt Annual Report and Accounts 2002

Directors’ Report & Financial Statements
for the year ended 31 December 2002




Contents
                                                        Page
Report of the directors                                  38
Statement of directors’ responsibilities                 41
Independent auditors’ report                             42
Statement of accounting policies                         43
Group profit and loss account                            45
Statement of total recognised gains and losses           46
Movement on reserves                                     46
Reconciliation of movement in shareholders’ funds        46
Group balance sheet                                      47
Company balance sheet                                    48    37

Group cash flow statement                                49
Notes on and forming part of the financial statements    50
Five year summaries                                      70
General business and aeronautical information            74
     Aer Rianta cpt Annual Report and Accounts 2002

     Report of the directors


     The directors have pleasure in submitting         Corporate Governance                            December 2002 and Mr. Oliver Cussen was
     their annual report together with the                                                             appointed in his place.
                                                       The directors continue to be committed to
     audited financial statements for the year         maintaining the highest standards of
     ended 31 December 2002.                                                                           A scheduled meeting of the Board is
                                                       corporate governance. Set out below are         usually held each month, except August.
     Principal Activities                              details of how the relevant principles of       Additional meetings are convened as
                                                       good governance contained in "The               required. The Board is responsible for the
     The Group’s principal activities are the          Combined Code: Principles of Good               proper management of the Group and
     development, operation and management             Governance and Code of Best Practice" are       takes all significant strategic decisions and
     of the three principal Irish airports –           applied in Aer Rianta cpt. The directors        retains full and effective control while
     Dublin, Shannon and Cork, Irish and               believe that the application of these           allowing operating management sufficient
     international airport retail management and       principles also assist the Group to comply      flexibility to run the business efficiently
     international airport investment. The Group       with the ethical and other considerations       and effectively within a centralised
     is also involved in the hotel industry in         implicit in the Code of Practice for the        reporting framework.
     Ireland through its subsidiary, Great             Governance of State Bodies published by
     Southern Hotels Group.                            the Department of Finance.                      The Board has reserved certain items for
                                                                                                       its review including, inter alia, the approval
     Review of the Business and Future                 The Board and Committees                        of the annual financial statements,
     Developments
                                                       The Group is headed by an effective Board,      budgets, corporate plan, significant
     Detailed commentaries on performance for          which currently comprises six non-              acquisitions and disposals, investments in
     the year ended 31 December 2002,                  executive directors, including three            joint ventures, significant contracts,
     including information on recent events and        employee directors, and one executive           property transactions, major investments,
     likely future developments, are contained         director (Chief Executive). The roles of the    significant capital expenditure and senior
     in the Chairman’s statement and the Chief         Chairman and Chief Executive are separate       management appointments. The Group has
     Executive’s review.                               and all of the non-executive directors are      a comprehensive process for reporting
38
                                                       independent of management. The Minister         management information to the Board.
     Results for the Year
                                                       for Transport, with the consent of the          The Board is provided with monthly
     The financial results of the Group for the        Minister for Finance, appoints the              information, which includes key
     year show a profit after taxation and             Chairman and other non-executive                performance and risk indicators for all
     exceptional items for the financial year          directors to the Board. The employee            aspects of the business.
     amounting to €36.2 million compared with          directors are appointed for a term of up to
     €11.6 million for 2001. Exceptional items                                                         All directors have access to the advice and
                                                       four years following a nomination and
     comprise profit on disposal of lands of                                                           services of the Company Secretary who is
                                                       election process under the Worker
     €6.1 million (before attributable tax charge                                                      responsible to the Board for ensuring that
                                                       Participation (State Enterprises) Acts, 1977
     of €0.8 million). The profits in 2001                                                             Board procedures are followed and that
                                                       and 1988. Other non-executive directors
     reflected an exceptional cost of €28.5                                                            applicable rules and regulations are
                                                       are appointed for terms not exceeding five
     million (before attributable tax credit of                                                        complied with. The Company’s
                                                       years. The Chief Executive is an ex officio
     €5.1 million) for a major restructuring                                                           professional advisers are available for
                                                       member of the Board appointed by the
     programme and an exceptional gain of                                                              consultation by the Board as required.
                                                       directors of the Company, and is the sole
     €5.3 million (before attributable tax charge                                                      Individual directors may take independent
                                                       executive director. On the expiration of
     of €1.1 million) on the disposal of a                                                             professional advice, if necessary, at the
                                                       their terms, Mr. Tadhg O’Donoghue and
     financial asset.                                                                                  Group’s expense. On appointment, all
                                                       Mr. Dermot O’Leary retired from the Board
                                                                                                       directors are provided with briefing
                                                       on 12 November 2002. Mr. Brian Hampson
                                                                                                       documents on the Group and its
                                                       retired as Company Secretary on 31
                                                                                                       operations as well as relevant training.

                                                                                                                       2002                    2001
                                                                                                                    € million              € million
     Group profit before exceptional items                                                                              75.9                    67.2
     Exceptional items (net)                                                                                              6.1                 (23.2)

     Group profit before interest                                                                                         82.0                   44.0
     Interest (net) – Group, associates and joint ventures                                                              (31.6)                 (25.8)

     Group profit before taxation                                                                                         50.4                  18.2
     Taxation – Group, associates and joint ventures                                                                    (14.2)                  (6.6)

     Profit for the financial year                                                                                        36.2                   11.6

     Details of the results for the year are set out in the Group profit and loss account and related notes.
Aer Rianta cpt Annual Report and Accounts 2002

Report of the directors (continued)


Ms. Freda Hayes is the Senior Independent       directors and Aer Rianta cpt or any of its      The organisation structure of the Group
Non-Executive Director.                         subsidiaries during the year.                   under the day-to-day direction of the Chief
                                                                                                Executive is clear. Defined lines of
Board Committees                                Directors’ Remuneration                         responsibility and delegation of authority
The Board has activated an effective            Fees for directors are determined by the        have been established.
committee structure to assist in the            Minister for Transport, with the consent of
                                                                                                Management are responsible for the
discharge of its responsibilities. Details in   the Minister for Finance. The remuneration
                                                                                                identification and evaluation of significant
relation to the various committees that         of the Chief Executive is determined in
                                                                                                risks applicable to their areas of business
operated during 2002 and their current          accordance with the arrangements issued
                                                                                                together with design and operation of
board membership is set out below.              by the Department of Transport for
                                                                                                suitable internal controls. As part of this
                                                determining the remuneration of Group
Audit Committee                                                                                 identification process management have
                                                Chief Executives of Commercial State
Mr. Liam Meade, Chairman, Ms. Freda                                                             identified the significant risks, which could
                                                Bodies under its aegis and is subject to the
Hayes and Mr. Pat Fitzgerald. This                                                              materially adversely affect the Group’s
                                                approval of the Remuneration Committee
committee normally meets at least four                                                          business financial condition or results of
                                                and the Minister for Transport.
times a year and operates under formal                                                          operations. These risks are assessed on a
                                                A proportion of the Chief Executive’s
terms of reference. The committee may                                                           continual basis and management report to
                                                remuneration is performance-related and,
review any matters relating to the financial                                                    the Board significant changes in the
                                                in this way, is linked to Group objectives
affairs and internal control arrangements                                                       business and external environment, which
                                                and strategies.
of the Group.                                                                                   affect the significant risks identified.
                                                Audit Committee and Auditors
Health & Safety Committee                                                                       The directors have established a number of
Mr. Noel Hanlon, Chairman, Mr. John             The Board maintains an objective and            key procedures designed to provide an
Burke, Mr. Pat Fitzgerald, Mr. Peter Dunne      professional relationship with the Group’s      effective system of internal control, which
and Mr. Cecil Brett. This committee             auditors. The Audit Committee, a formally       includes an annual review of the
monitors and reviews matters in relation to     constituted committee of the Board, is          effectiveness of the system of internal         39
aviation safety, and health and safety at       comprised of non-executive directors. Its       control. The key procedures, which are
work at each of Dublin, Shannon and Cork        written terms of reference deal clearly with    supported by detailed controls and
airports.                                       its authority and its duties. The Audit         processes, are as follows:
                                                Committee is responsible to the Board for
Remuneration Committee                          the review of internal financial controls and   • active Board involvement in assessing
Mr. Noel Hanlon, Chairman, Ms. Freda            the scope and performance of the Group            key business risks faced by the Group
Hayes and Mr. Liam Meade. This                  Internal Audit function. It also reviews the      and determining the appropriate course
committee determines and approves               scope and results of the external audit and       of action for managing these risks;
remuneration and bonus arrangements for         the nature and extent of services provided
                                                                                                • the putting in place of a formalised risk
the senior management group. Details of         by the external auditors. The Chairman of
                                                                                                  reporting system;
directors’ fees and emoluments are set out      the Audit Committee reports to the Board
in note 6 to the financial statements in        on all significant issues considered by the     • a schedule of items reserved to the
accordance with the requirements of the         committee and the minutes of its meetings         Board for review as previously outlined;
Companies Acts, 1963 to 2001.                   are circulated to all directors.
                                                                                                • a clearly defined organisation structure
Security Committee                              Accountability and Audit                          with appropriate segregation of duties
Mr. Noel Hanlon, Chairman and Mr. John                                                            and delegation of responsibility and
                                                The directors acknowledge their overall
Burke. This committee monitors and                                                                authority within which the Group’s
                                                responsibility for establishing and
reviews matters in relation to security at                                                        activities can be planned, executed,
                                                maintaining the system of internal control
Dublin, Shannon and Cork airports.                                                                controlled and monitored to achieve the
                                                throughout the Group.
                                                                                                  strategic objectives which the Board has
Directors’ and Secretary’s Interests
                                                The system of internal control comprises          adopted for the Group;
The directors and secretary had no              those ongoing processes for identifying,
beneficial interest in the shares of the        evaluating and managing the significant         • a formal code of business ethics;
Company or in those of its subsidiaries at      risks faced by the Group in pursuing its
                                                                                                • a comprehensive system of management
any time during the year or the preceding       business objectives. Such a system is
                                                                                                  and financial reporting, accounting,
financial year.                                 designed to manage rather than eliminate
                                                                                                  treasury management and project
                                                risk of failure and can therefore only
The Board is satisfied that its non-                                                              appraisal;
                                                provide reasonable and not absolute
executive directors are free from any
                                                assurance that the Group will achieve           • clearly defined limits and procedures for
business or other relationship that could
                                                those objectives or that the Group will not       financial expenditure including
materially interfere with the exercise of
                                                suffer material misstatement or loss.             procurement and capital expenditure;
their independent judgement. There was
no significant contract between any of the
     Aer Rianta cpt Annual Report and Accounts 2002

     Report of the Directors (continued)


     • annual budgets and long-term plans for       Compliance Statement                           action to ensure compliance with the Act,
       the Group and business units;                                                               including the adoption of safety
                                                    The Group has been in compliance with
                                                                                                   statements.
     • representation at Board level in the         the Code of Best Practice provisions of the
       Group’s principal associates and joint       Combined Code relevant to it throughout        Subsidiary, Associated and Joint Venture
       ventures;                                    the financial year under review and up to      Undertakings
                                                    the date of this report other than as
     • monitoring of performance against            follows:                                       The information required by Section 158 of
       budgets for the Group and its principal                                                     the Companies Act, 1963 in relation to
       associates and joint ventures and            • as directors are either appointed by the     subsidiary, associated and joint venture
       reporting thereon to the Board on a            Minister for Transport with the consent      undertakings is set out in note 11.
       monthly basis;                                 of the Minister for Finance or by the
                                                      Board, the provisions in relation to a       Prompt Payments Act
     • an Internal Audit department which             Nomination Committee and director            Aer Rianta cpt’s policy is to comply with
       reviews key systems and controls;              re-election do not apply;                    the requirements of the Prompt Payment
     • an Audit Committee, which reviews audit      • full disclosure is made in these financial   of Accounts Act, 1997 as amended by the
       plans and deals with significant control       statements relating to directors’            European Communities (Late Payment in
       issues raised by the internal or external      emoluments and pension contributions         Commercial Transactions) Regulation 2002
       auditors and meets periodically with the       in accordance with the requirements of       (SI 388).
       internal auditors and the external             the Irish Companies Acts, 1963 to 2001       The Company’s standard terms of credit,
       auditors;                                      and the Department of Transport.             unless otherwise specified in contractual
                                                      However, these disclosures do not            arrangements, are in compliance with the
     • full and unrestricted access to the Audit
                                                      extend to those contained in the             Act. The Company has instituted
       Committee for internal and external
                                                      Combined Code.                               procedures to implement and monitor
40     audit;
                                                    The Group also complied with the ethical       compliance with the requirements and
     • a Group Aviation Safety and Standards                                                       these procedures provide reasonable but
                                                    and other provisions implicit in the Code of
       function which monitors and reports on                                                      not absolute assurance against material
                                                    Practice for the Governance of State
       aviation safety and security standards                                                      non-compliance. As in previous years,
                                                    Bodies issued by the Department of
       and operational procedures at the                                                           substantially all Company payments by
                                                    Finance.
       airports;                                                                                   number and value were made within the
                                                    Going Concern                                  appropriate credit period as required.
     • a Health & Safety Committee that
                                                                                                   Interest of €20,000 was paid in the year.
       monitors and reviews matters in relation     The directors have a reasonable
       to aviation safety, and health and safety    expectation that the Group has adequate        Electoral Act, 1997
       at work at the airports;                     resources to continue in operation for the     The Group did not make any political
                                                    foreseeable future. For this reason, they      donations during the year.
     • a Security Committee that monitors and
                                                    continue to adopt the going concern basis
       reviews matters in relation to security at
                                                    in preparing the financial statements.         Post Balance Sheet Events
       the airports.
                                                    Accounting Records                             There have been no significant post
     The directors confirm that the Group’s                                                        balance sheet events which require
     ongoing process for identifying, evaluating    The directors believe that they have           adjustment to the financial statements or
     and managing the significant risks facing it   complied with the requirements of section      the inclusion of a note thereto.
     is in accordance with the guidance in          202 of the Companies Act, 1990 with
     Internal Control: Guidance for Directors on    regard to books of account by employing        Auditors
     the Combined Code (Turnbull). In               accounting personnel with appropriate
                                                                                                   In accordance with Section 160(2) of the
     particular, the Board has reviewed the         expertise and by providing adequate
                                                                                                   Companies Act, 1963, the auditors, KPMG,
     process for identifying and evaluating the     resources to the financial function. The
                                                                                                   Chartered Accountants, will continue in
     significant risks affecting the business and   books of account of the Company are
                                                                                                   office.
     the policies and procedures by which these     maintained at the Company’s premises at
     risks are managed. Associated companies        Dublin, Shannon and Cork airports.             On behalf of the Board
     are considered as part of the Group’s on-                                                     Noel Hanlon Chairman
                                                    Health and Safety
     going risk review process.                                                                    Liam Meade Director
                                                    The wellbeing of the Group’s employees is      26 March 2003
     Communication with Shareholder                 safeguarded through the strict adherence
     Through regular contact with relevant          to health and safety standards. The Safety,
     Government Departments, the Board and          Health and Welfare at Work Act, 1989
     management maintain an ongoing dialogue        imposes certain requirements on
     with the Company’s shareholder on              employers and all relevant companies
     strategic issues.                              within the Group have taken the necessary
Aer Rianta cpt Annual Report and Accounts 2002

Statement of directors’ responsibilities


Company law requires the directors to
prepare financial statements for each
financial year which, in accordance with
applicable Irish law and accounting
standards, give a true and fair view of the
state of affairs of the Company and of the
Group and of the profit or loss of the
Group for that period. In preparing those
financial statements, the directors are
required to:

• select suitable accounting policies and
  then apply them consistently

• make judgements and estimates that are
  reasonable and prudent

• prepare the financial statements on the
  going concern basis unless it is
  inappropriate to presume that the Group
  will continue in business.

The directors are responsible for keeping
proper books of account which disclose
with reasonable accuracy at any time the
financial position of the Company and of
                                                 41
the Group and to enable them to ensure
that the financial statements comply with
the Companies Acts, 1963 to 2001 and all
Regulations to be construed as one with
those Acts. They have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Group and to prevent and
detect fraud and other irregularities.

On behalf of the Board
Noel Hanlon Chairman
Liam Meade Director
26 March 2003
     Aer Rianta cpt Annual Report and Accounts 2002

     Independent auditors’ report to the members of
     Aer Rianta cpt

     We have audited the financial statements        Company to hold an extraordinary              explanations which we considered
     on pages 43 to 69.                              general meeting on the grounds that the       necessary in order to provide us with
                                                     net assets of the Company, as shown in        sufficient evidence to give reasonable
     This report is made solely to the               the financial statements, are less than       assurance that the financial statements are
     Company's members, as a body, in                half of its share capital.                    free from material misstatement, whether
     accordance with section 193 of the                                                            caused by fraud or other irregularity or
     Companies Act, 1990. Our audit work has       We also report to you if, in our opinion,       error. In forming our opinion we also
     been undertaken so that we might state to     information specified by law regarding          evaluated the overall adequacy of the
     the Company's members those matters we        directors’ remuneration and transactions        presentation of information in the financial
     are required to state to them in an           with the Group is not disclosed.                statements.
     auditor's report and for no other purpose.
     To the fullest extent permitted by law, we    We review, at the request of the directors,     Opinion
     do not accept or assume responsibility to     whether the voluntary statement on page 40
                                                   reflects the Group’s compliance with the        In our opinion, the financial statements
     anyone other than the Company and the                                                         give a true and fair view of the state of
     Company's members, as a body, for our         seven provisions of the Combined Code that
                                                   the Irish Stock Exchange specifies for review   affairs of the Group and the Company as at
     audit work, for this report, or for the                                                       31 December 2002 and of the profit of the
     opinions we have formed.                      by auditors, and we report if it does not.
                                                   We are not required to consider whether         Group for the year then ended and have
     Respective responsibilities of directors      the Board’s statements on internal controls     been properly prepared in accordance with
     and auditors                                  cover all risks and controls, or form an        the Companies Acts, 1963 to 2001 and all
                                                   opinion on the effectiveness of the Group’s     Regulations to be construed as one with
     The directors are responsible for preparing                                                   those Acts.
                                                   corporate governance procedures or its risk
     the annual report. As described on page
                                                   and control procedures.                         We have obtained all the information and
     41, this includes responsibility for
     preparing the financial statements in         We read the other information contained in      explanations we considered necessary for
42   accordance with applicable Irish law and                                                      the purposes of our audit. In our opinion,
                                                   the annual report, including the corporate
     accounting standards. Our responsibilities,   governance statement and consider               proper books of account have been kept by
     as independent auditors, are established      whether it is consistent with the audited       the Company. The balance sheet of the
     in Ireland by statute, the Auditing           financial statements. We consider the           Company is in agreement with the books
     Practices Board and by our profession’s       implications for our report if we become        of account.
     ethical guidance.                             aware of any apparent misstatements or          In our opinion, the information given in the
                                                   material inconsistencies with the financial     report of the directors on pages 38 to 40 is
     We report to you our opinion as to
                                                   statements.                                     consistent with the financial statements.
     whether the financial statements give a
     true and fair view and are properly           Basis of audit opinion
     prepared in accordance with the                                                               The net assets of the Company, as stated
     Companies Acts. As also required by the       We conducted our audit in accordance            in the balance sheet on page 48, are more
     Acts, we state whether we have obtained       with Auditing Standards issued by the           than half of the amount of its called up
     all the information and explanations we       Auditing Practices Board. An audit includes     share capital and, in our opinion, on that
     require for our audit, whether the            examination, on a test basis, of evidence       basis there did not exist at 31 December
     Company’s balance sheet is in agreement       relevant to the amounts and disclosures in      2002 a financial situation which, under
     with the books of account and report to       the financial statements. It also includes an   section 40(1) of the Companies
     you our opinion as to whether                 assessment of the significant estimates         (Amendment) Act, 1983, would require the
                                                   and judgements made by the directors in         convening of an extraordinary general
     • the Company has kept proper books of        the preparation of the financial statements,    meeting of the Company.
       account;                                    and of whether the accounting policies are
                                                   appropriate to the Group’s circumstances,       KPMG
     • the report of the directors is consistent   consistently applied and adequately             Chartered Accountants
       with the financial statements;              disclosed.                                      Registered Auditors
                                                                                                   Dublin
     • at the balance sheet date a financial       We planned and performed our audit so as        26 March 2003
       situation existed that may require the      to obtain all the information and
Aer Rianta cpt Annual Report and Accounts 2002

Statement of accounting policies
for the year ended 31 December 2002



The following accounting policies have         Company and the Group balance sheet on          Southern Hotels Group, are stated either at
been applied consistently, in dealing with     the same basis, with income from such           a valuation on an open market existing use
items which are considered material in         assets being recognised on a receivable         basis at 31 December 1994 or at cost if
relation to the Group’s financial              basis in the profit and loss account.           acquired subsequently. That Group is
statements.                                                                                    availing of the transitional provision of
                                               Turnover                                        Financial Reporting Standard 15 (FRS 15)
Basis of Preparation                           Turnover represents the value of goods          "Tangible Fixed Assets" in continuing to
The financial statements are prepared in       and services, net of discounts, supplied to     carry such assets at their previous
accordance with generally accepted             external customers excluding intra-Group        revalued amounts, which is not being
accounting principles under the historical     sales and value added tax.                      updated for subsequent changes in value
cost convention, as modified by the                                                            except as adjusted for subsequent
revaluation of certain assets, and comply      Foreign Currency                                additions, disposals and impairment,
with financial reporting standards of the      Transactions arising in foreign currencies      if any.
Accounting Standards Board, as                 are translated into euro at the rates of
                                                                                               The directors of Great Southern Hotels
promulgated by The Institute of Chartered      exchange ruling at the date of the
                                                                                               Limited review the estimates of useful lives
Accountants in Ireland.                        transactions or at contracted rates.
                                                                                               and residual values of its hotel buildings
                                               Monetary assets and liabilities
Basis of Consolidation                                                                         annually, and have determined that any
                                               denominated in foreign currencies are
                                                                                               charge to depreciation would be
The Group financial statements consolidate     translated into euro at the contracted rates
                                                                                               immaterial. On an annual basis, that Group
the financial statements of the Company        or at year-end rates of exchange. The
                                                                                               also estimates the recoverable amount of
and its subsidiary undertakings                resulting profits or losses are dealt with in
                                                                                               its hotel buildings; to the extent that the
(subsidiaries) made up to 31 December          the profit for the year.
                                                                                               recoverable amount is less than the
2002.
                                               Where applicable, the Group’s net               carrying amount, an impairment loss is
Joint venture undertakings (joint ventures)    investment in overseas subsidiaries,            recognised in the financial statements.
                                                                                                                                               43
are those undertakings over which the          associates and joint ventures is translated
                                                                                               Capitalisation of Interest
Group exercises control jointly with one or    at the rate ruling at the balance sheet date.
more other parties. Associated                 The results of overseas subsidiaries,           Interest incurred up to the time that
undertakings (associates) are those            associates and joint ventures are, where        separately identifiable major capital
undertakings in which the Group has a          applicable, included at the average rate of     projects are ready for service is capitalised
participating interest in the equity capital   exchange. The resulting translation             as part of the cost of the assets.
and over which it is able to exercise          differences are taken to reserves.
                                                                                               Intangible Assets
significant influence.
                                               Tangible Fixed Assets and Depreciation          Purchased goodwill arising on an
The Group includes its share of associates’    Depreciation is calculated to write off the     acquisition (representing the excess of the
and joint ventures’ profits and losses and     cost of tangible fixed assets other than        fair value of the consideration given over
separately discloses its share of its joint    land and freehold hotel properties on a         the fair value of the separate net assets
ventures’ turnover in the consolidated         straight line basis over the estimated          acquired) is capitalised and is amortised
profit and loss account. For associates, the   useful lives as follows:                        on a straight line basis over its estimated
Group includes its share of net assets in                                                      useful life, the period during which
the consolidated balance sheet. For joint      Terminal complexes            10 - 50 years     benefits are expected to accrue.
ventures, the Group includes its share of
                                               Airfields                     10 - 50 years
gross assets and gross liabilities in the                                                      Purchased goodwill is being amortised
consolidated balance sheet.                    Plant and equipment            2 - 20 years     over a twenty year period or where shorter
                                                                                               the period of the concession agreement
The results of subsidiaries, associates and    Other property              10 - 50 years
                                                                                               entered into in the acquired entity.
joint ventures acquired or disposed of in      (excluding hotel buildings)
the year are included in the consolidated                                                      Where events or circumstances are
                                               Where a tangible fixed asset is to be
profit and loss account from the date of                                                       present which indicate that the carrying
                                               withdrawn from use, the depreciation
acquisition or up to the date of disposal.                                                     amount of goodwill may not be
                                               charge for that asset is accelerated to
                                                                                               recoverable, the Group estimates the
Financial Assets                               reflect the asset’s remaining useful life
                                                                                               recoverable amount based on the present
                                               based on the period between the date of
Investments in subsidiaries, joint ventures                                                    value of future cashflows expected to
                                               the decision to withdraw the asset and the
and associates are shown in the Company                                                        result from the use of the asset and its
                                               forecast date when withdrawal will take
balance sheet as financial fixed assets and                                                    eventual disposition. Where this amount is
                                               place.
are valued at cost less provisions for                                                         less than the carrying amount of the asset,
impairment in value. Other financial fixed     The freehold hotel properties of the            the Group will recognise an impairment loss.
assets are also carried in both the            Company’s subsidiary undertaking, Great
     Aer Rianta cpt Annual Report and Accounts 2002

     Statement of accounting policies (continued)
     for the year ended 31 December 2002



     Intangible Assets (continued)                  expected to reverse. As permitted by FRS       Derivative Financial Instruments
                                                    19, deferred tax is not recognised on the      The principal objective of using derivative
     Other intangible assets are recorded at
                                                    gains arising from the revaluation of hotel    financial instruments, including forward
     acquisition cost, being fair values at date
                                                    properties. No deferred tax has been           exchange contracts, forward rate
     of acquisition, less the amounts amortised
                                                    recognised on the unremitted earnings of       agreements and interest rate swaps, is to
     to the profit and loss account. These
                                                    overseas subsidiaries and associates as no     hedge the Group’s interest rate and
     intangible assets are amortised over their
                                                    tax is expected to be payable on them.         currency exposures. Where these
     economic lives, being the terms of various
                                                    Deferred tax assets are recognised to the      derivative financial instruments hedge an
     concessions which currently range from
                                                    extent that they are regarded as               asset, liability or interest cost reflected in
     three to eight years.
                                                    recoverable based on the likelihood of         the financial statements, the cost of the
     Stocks                                         there being suitable taxable profits from      hedging instrument is included in the
                                                    which the future reversal of the underlying    carrying amount together with the income
     Stocks are stated at the lower of cost and
                                                    timing differences can be deducted.            and expenses relating to the asset and
     net realisable value. Cost is based on
     invoice price on either an average basis or    Pension and Other Post-Retirement              liability. Where the derivative is a hedge of
     on a first in first out basis depending on     Obligations                                    future cash flow, the gains and losses on
     the stock category. Net realisable value is                                                   the hedging instruments are not
                                                    The Group provides pensions to                 recognised until the hedged future
     calculated as estimated selling price less
                                                    substantially all employees through            transaction occurs.
     estimated selling costs.
                                                    contributions to a number of separately
     Taxation                                       administered schemes, the majority of          Cash and Liquid Resources
                                                    which are defined or target benefit pension    Within the Group cash flow statement,
     Corporation tax in respect of the Company
                                                    schemes.                                       cash is defined as cash, deposits repayable
     and its subsidiary undertakings is provided
     at current rates and is calculated on the      The expected cost of providing pensions        on demand and overdrafts. Other deposits
44   basis of their results for the year adjusted   and other retirement benefits to employees     with maturity or notice periods of over one
     for taxation purposes and taking account       is charged to the profit and loss account      working day, but less than one year, are
     of the availability of Shannon Relief, where   as incurred over the period of employment      classified as liquid resources.
     appropriate. The taxation charge in the        of pensionable employees.                      Debt and Finance Costs
     profit and loss account includes taxation
     on the Group’s share of profits of             Operating Leases                               Debt is initially stated at the amount of the
     associated and joint venture undertakings.     Expenditure on operating leases is charged     net proceeds after deduction of
                                                    to the profit and loss account on a basis      finance/issue costs. Finance and issue
     Full provision without discounting is made                                                    costs are charged to the profit and loss
                                                    representative of the benefit derived from
     for all timing differences, other than those                                                  account over the term of the debt at a
                                                    the asset, normally on a straight-line basis
     arising from revaluation gains in the case                                                    constant rate on the carrying amount.
                                                    over the lease period.
     of Great Southern Hotels Group, at the
     balance sheet date in accordance with          Capital Grants
     Financial Reporting Standard 19 (FRS 19)
     "Deferred Tax". Provision is made at the tax   Capital grants are treated as deferred
     rates that are expected to apply in the        income and amortised over the expected
     periods in which the timing differences are    lives of the related fixed assets.
Aer Rianta cpt Annual Report and Accounts 2002

Group profit and loss account
for the year ended 31 December 2002



                                                                                                2002            2001
                                                                Note                            €000            €000

Turnover: Group and share of joint ventures                                                  427,036         441,980
Less: share of joint ventures’ turnover                                                       (6,162)         (3,660)

Group turnover - continuing operations                              1                        420,874         438,320

Operating costs
   Cost of goods for resale                                                                 (114,952)        (137,655)
   Payroll and related costs                                        2                       (142,636)        (134,855)
   Materials and services                                                                    (93,482)         (93,257)
   Depreciation and amortisation                                                             (36,530)         (30,595)

                                                                                            (387,600)        (396,362)

Group operating profit - continuing operations                                                33,274          41,958
Share of operating profits
   Joint venture undertakings                                                                  3,062           1,501
   Associated undertakings                                          3                         39,576          23,744

Group profit before exceptional items                                                         75,912          67,203
Exceptional items – continuing operations
    Profit on disposal of fixed assets                              4                          6,056                -
    Profit on disposal of financial assets                          4                              -            5,272
    Costs of fundamental restructuring                              4                              -          (28,500)
                                                                                                                         45
Group profit before interest                                                                  81,968          43,975

Income from other financial assets                                                             1,344             298

Interest receivable
    Group                                                                                      1,880            3,721
    Joint venture undertakings                                                                    49                -
    Associated undertakings                                                                      188              609

Interest payable
    Group                                                           5                        (23,296)         (21,663)
    Joint venture undertakings                                      5                           (746)            (845)
    Associated undertakings                                         5                        (10,987)          (7,905)

Group profit on ordinary activities before taxation                 6                         50,400          18,190
   Taxation on profit on ordinary activities                        7                        (14,172)         (6,627)

Group profit on ordinary activities after taxation                                            36,228          11,563
   Minority interest - equity                                      28                             (5)              4

Group profit for the financial year                                 8                         36,223          11,567

Group profit and loss account at beginning of year                                           172,602         161,073

Transfer from profit and loss account reserve arising
from renominalisation of share capital                             19                                -            (38)

Profit and loss account at end of year                                                       208,825         172,602


There is no material difference between results as reported and those prepared on a historical cost basis.

On behalf of the Board
Noel Hanlon Chairman
Liam Meade Director
26 March 2003
     Aer Rianta cpt Annual Report and Accounts 2002

     Other consolidated financial statements
     for the year ended 31 December 2002




     Statement of total recognised gains and losses
                                                                                2002       2001
                                                                       Note     €000       €000

     Profit for the financial year                                             36,223     11,567
     Exchange differences on translation
     of overseas investments (arising on net assets)
         subsidiary undertakings                                                 (754)      (116)
         associated undertakings                                               (4,378)       588
     Gain arising on acquisition of shares in associated undertaking                -      2,277

     Total recognised gains and losses for the year                            31,091     14,316



     Movement on reserves
     At 1 January                                                             185,901    171,623

     Retained profit for the financial year                             20     36,223     11,567
     Currency translation adjustments                                   20     (5,132)       472
     Gain arising on acquisition of shares in associated undertaking                -      2,277
     Transfer from profit and loss account reserve
     arising from renominalisation of share capital                     19          -        (38)
46   At 31 December                                                     20    216,992    185,901


     Included in the financial statements of:
     Parent company                                                     20     65,358     49,153
     Subsidiary undertakings                                            20     93,305     87,912
     Joint venture undertakings                                         20      2,239        465
     Associated undertakings                                            20     56,090     48,371

     At 31 December                                                     20    216,992    185,901




     Reconciliation of movement in shareholders’ funds
     At 1 January                                                             372,238    357,922
     Total recognised gains and losses for the year                            31,091     14,316

     At 31 December                                                           403,329    372,238
Aer Rianta cpt Annual Report and Accounts 2002

Group balance sheet
at 31 December 2002



                                                                    2002        2001
                                                          Note      €000        €000

Fixed assets
Tangible assets                                             9    698,394     638,943
Intangible assets                                          10      7,883       8,448

                                                                 706,277     647,391

Financial assets
Investments in joint venture undertakings
Share of gross assets                                              20,609      20,055
Share of gross liabilities                                        (25,028)    (26,248)
Loans to joint venture undertakings                                 4,882       4,882

                                                                     463      (1,311)
Investment in associated undertakings                            155,478     152,085
Other financial assets                                            30,076      30,225

Total financial assets                                     11    186,017     180,999

                                                                 892,294     828,390

Current assets
Stocks                                                     12     18,922      20,217
Debtors                                                    13     37,166      33,370
Cash at bank and in hand                                          96,855      45,328
                                                                                         47
                                                                 152,943      98,915

Creditors: amounts falling due within one year             14    (135,453)   (138,945)

Net current assets/(liabilities)                                  17,490      (40,030)

Total assets less current liabilities                            909,784     788,360

Creditors: amounts falling due after more than one year    15    (463,444)   (354,078)
Capital grants                                             17     (30,437)    (32,150)
Provisions for liabilities and charges                     18     (12,628)    (29,994)

Net assets                                                       403,275     372,138

Capital and reserves
Called up share capital                                    19    186,337     186,337
Profit and loss account                                    20    208,825     172,602
Other reserves                                             20      8,167      13,299

Shareholders' funds - equity                                     403,329     372,238
Minority interest - equity                                 28        (54)       (100)

                                                                 403,275     372,138


On behalf of the Board
Noel Hanlon Chairman
Liam Meade Director
26 March 2003
     Aer Rianta cpt Annual Report and Accounts 2002

     Company balance sheet
     at 31 December 2002



                                                                         2002        2001
                                                               Note      €000        €000

     Fixed assets
     Tangible assets                                             9    577,308     535,774
     Financial assets                                           11    131,849     132,432

                                                                      709,157     668,206

     Current assets
     Stocks                                                     12     11,600      14,555
     Debtors                                                    13     65,679      42,587
     Cash at bank and in hand                                          82,181      34,334

                                                                      159,460      91,476

     Creditors: amounts falling due within one year             14    (121,321)   (120,664)


     Net current assets/(liabilities)                                  38,139      (29,188)

     Total assets less current assets/liabilities                     747,296     639,018

     Creditors: amounts falling due after more than one year    15    (456,232)   (345,523)
     Capital grants                                             17     (29,331)    (31,045)
     Provision for liabilities and charges                      18     (10,038)    (26,960)
48
     Net assets                                                       251,695     235,490



     Capital and reserves
     Called up share capital                                    19    186,337     186,337
     Profit and loss account                                    20     65,358      49,153

     Shareholders’ funds - equity                                     251,695     235,490


     On behalf of the Board
     Noel Hanlon Chairman
     Liam Meade Director
     26 March 2003
Aer Rianta cpt Annual Report and Accounts 2002

Group cash flow statement
for the year ended 31 December 2002



                                                            2002        2001
                                                   Note     €000        €000

Cash inflow from operating activities               21     63,296     82,897

Payments in respect of exceptional restructuring
programme                                           18    (18,697)          -

Dividends received from associated undertakings             3,571       5,268

Returns on investments and servicing of finance     22    (18,352)     (5,212)

Corporation tax paid                                         (930)    (10,406)

                                                           28,888     72,547

Capital expenditure and financial investment        22    (88,010)   (122,271)

Acquisitions and disposals                          22      6,363      (4,500)

Cash outflow before management of liquid
resources and financing                                   (52,759)    (54,224)

Management of liquid resources
Net cash transferred to liquid resources            23    (48,697)    (25,395)   49

Financing                                           22    107,556     94,756

Increase in cash in year                            23      6,100     15,137
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes on and forming part of the financial statements
     for the year ended 31 December 2002




     1 Turnover - continuing operations                                                                                             Group

                                                                                                                         2002                   2001
                                                                                                                         €000                   €000
        Activity
        Aeronautical revenue                                                                                          107,165                 104,709
        Commercial activities                                                                                         271,010                 291,683
        Hotels                                                                                                         42,699                  41,928

        Total turnover                                                                                                420,874                 438,320

        Geographical
        Irish airports                                                                                                331,492                 353,076
        Irish hotel activities                                                                                         42,699                  41,928
        Overseas                                                                                                       46,683                  43,316

        Total turnover                                                                                                420,874                 438,320

        A segmental analysis of results and net assets is not provided, as disclosure of such information would, in the directors’ opinion,
        be seriously prejudicial to the interest of the Group.



     2 Payroll and related costs
        Wages and salaries                                                                                            124,019                 118,261
50      Social welfare costs                                                                                           12,165                  12,293
        Pension costs                                                                                                   6,186                   4,352
        Other staff costs                                                                                               1,271                     855

                                                                                                                      143,641                 135,761
        Staff costs capitalised into fixed assets                                                                      (1,005)                   (906)

        Net staff costs                                                                                               142,636                 134,855


        Employee figures (full time equivalents) for the Group                                                           2002                   2001
        were as follows:
        Airports                                                                                                         2,416                  2,511
        Hotels                                                                                                             708                    737
        International activities                                                                                           307                    190

                                                                                                                         3,431                  3,438


     3 Share of operating profits of associated undertakings
        This relates to the Group’s share of profits before interest and taxation for the year in its associated undertakings as defined in
        the Statement of Accounting Policies. Management fees and other direct income from these undertakings are included in
        turnover of the Group.


     4 Exceptional items
        Profit on disposal of fixed and financial assets:
        A profit of €6.056 million (net of attributable costs) arose on the disposal of land in the parent and a subsidiary company. The capital
        gains tax arising is €0.777 million. In 2001 a profit of €5.272 million (net of attributable costs) arose on the disposal of an option
        to acquire an additional shareholding in an associated undertaking. The capital gains tax arising was €1.054 million.

        Costs of fundamental restructuring:
        In 2001 a number of fundamental change programmes including a voluntary severance scheme were initiated and agreed across Aer
        Rianta to significantly change structures, work practices, systems and processes. The cost of the restructuring programme resulted in
        a charge of €28.5 million in 2001 (which had the effect of reducing the tax charge in 2001 by €5.1 million). This programme
        continues into 2003. The total amount paid to 31 December 2002 was €18.7 million.
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




5 Interest payable                                                          Group
                                                                   2002              2001
                                                                   €000              €000
   Group
   Interest payable on loans wholly repayable by
   instalments within five years                                   1,350             2,248
   Interest payable on loans wholly repayable after five years     6,741             6,351
   Interest on loan notes                                         15,375            13,395
   Amortisation of issue costs                                       117                93
   Other interest payable                                             20                34

                                                                  23,603            22,121

   Interest capitalised                                             (307)            (458)

   Total interest payable - Group                                 23,296            21,663

   Joint venture undertakings
   Interest on loans repayable by instalments within five years     746               845


   Associated undertakings
   Interest payable on loans repayable by
   instalments within five years                                   3,507             2,577
   Interest payable on loans repayable
   by instalments after five years                                 9,261             7,478
   Finance lease interest                                              5                 -    51
   Interest capitalised                                           (1,786)           (2,150)

   Total interest payable – associated undertakings               10,987             7,905
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     6 Statutory and other information
                                                                                                                            Group

                                                                                                                  2002               2001
                                                                                                                  €000               €000
     Group profit on ordinary activities before tax is stated after charging/(crediting):

         Auditors' remuneration (including expenses):
         for audit services                                                                                         329               285
         for other services                                                                                         499               584

                                                                                                                    828               869

         Operating lease rentals:
         equipment                                                                                               1,634               1,651
         buildings                                                                                               7,664               8,174

         Depreciation:
         normal                                                                                                 35,469              30,572
         accelerated                                                                                               202                  36

                                                                                                                35,671              30,608

         Amortisation of capital grants                                                                          (1,713)            (1,723)

52       Amortisation of intangible assets and goodwill                                                          2,206               1,775

         Directors' remuneration:
         fees                                                                                                       127               121
         other emoluments (including pension contribution)                                                          303               273

                                                                                                                    430               394

         The remuneration package of the Group Chief Executive reflected in the amounts shown above as directors’ remuneration
         was as follows:

         Directors’ fee                                                                                              13                13
         Basic salary                                                                                               234               217
         Performance related remuneration                                                                            35                28
         Pension contributions and taxable benefits                                                                  33                28

                                                                                                                    315               286
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




7 Taxation on profit on ordinary activities                                                                                      Group
                                                                                                                     2002                 2001
                                                                                                                     €000                 €000

   Current tax:
   Corporation tax - Ireland                                                                                            51                  325
   Overseas tax of subsidiary undertakings                                                                             843                  113

                                                                                                                       894                  438

   Capital gains tax – Ireland (note 4)                                                                                777                1,054

   Tax attributable to Group                                                                                         1,671                1,492

   Share of Irish tax of joint venture                                                                                 591                  191

   Share of Irish tax of associated undertakings                                                                       256                  308

   Share of overseas tax of associated undertakings                                                                  8,146                4,888

   Overprovision in respect of prior periods                                                                        (1,472)                    -

   Current tax charge                                                                                                9,192                6,879

   Deferred tax:
   Origination/reversal of timing differences
      attributable to Group (note 18)                                                                                1,331                 (891)
      share of associated undertakings                                                                               3,649                  639      53
   Deferred tax charge/(credit)                                                                                      4,980                 (252)

   Taxation on profit on ordinary activities                                                                        14,172                6,627

   Irish corporation tax has been reduced by the effect of Shannon Relief of €Nil (2001: €0.181 million).

   The Group’s Irish operations are subject to differing rates of corporation taxation, according to, inter alia, the nature of activities. During
   2002 these rates varied from 10% to 25%. The standard rate of corporation taxation in the Republic of Ireland, which applies to certain
   of the Group’s income, is reducing from 16% in 2002 (2001: 20%) to 12.5% in 2003.

   No provision has been made for deferred tax on gains recognised on revaluing hotel properties to their market value in 1994, in
   accordance with Financial Reporting Standard 19 (FRS19) ‘Deferred Tax’. Deferred tax would only be payable if the hotels were sold
   at their book values. The total amount unprovided for is €3.5 million. It is not envisaged that any such tax will be payable in the
   foreseeable future.

   The current tax charge for the period is higher than the standard rate of tax in the Republic of Ireland. The differences are set out in
   the tax reconciliation below:

   Profit on ordinary activities                                                                                    50,400               18,190

   Profit on ordinary activities at standard corporation
   tax rate in Republic of Ireland of 16% (2001: 20%)                                                                8,064                3,638

   Effects of:
   Capital allowances for period in excess of depreciation                                                            (951)              (1,523)
   Expenses (deductible)/not deductible for tax purposes in the current year (timing differences)                     (915)               2,386
   Expenses not deductible for tax purposes (permanent differences)                                                    783                  932
   Profits of foreign undertakings taxable at higher rates                                                           3,622                1,735
   Profits taxable at lower rates                                                                                        -                 (181)
   Irish profits taxable at higher rates                                                                               357                   97
   Other                                                                                                              (296)                (205)
   Overprovision in respect of prior periods                                                                        (1,472)                   -

   Current tax charge for the year                                                                                   9,192                6,879
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     8 Profit for the financial year
     A separate company profit and loss account is not presented as provided for under the Companies (Amendment) Act 1986, Section 3(2).
     A profit of €16.2 million (2001: loss €5.1 million) has been dealt with in the financial statements of the Company.



     9 Tangible fixed assets
     Group                                Terminal      Lands &        Plant &        Hotel          Other          Assets in        Total
                                        complexes       airfields   equipment     buildings       property        the course
                                                                                                             of construction

                                               €000        €000         €000          €000           €000              €000         €000

     Cost or valuation
     At 1 January 2002
     Cost                                    270,111    149,386       172,682        29,050       134,908            60,016       816,153
     Valuation                                     -          -             -        41,647             -                 -        41,647

     Total                                   270,111    149,386       172,682        70,697       134,908            60,016       857,800


     Additions                                   100        117          7,181       16,734            31            71,642        95,805
     Transfer to completed assets             10,858     20,540          4,713        9,920        15,758           (61,789)            -
     Acquisition of subsidiary undertaking         -          -            529            -             -                 -           529
54   Disposals                                     -       (164)          (427)        (508)            -                 -        (1,099)
     Translation                                   -          -           (448)           -             -                 -          (448)
     Write-offs                                 (190)         -         (1,505)           -           (31)                -        (1,726)


     At 31 December 2002
     Cost                                    280,879    169,879       182,725        55,196       150,666            69,869       909,214
     Valuation                                     -          -             -        41,647             -                 -        41,647


     At 31 December 2002                     280,879    169,879       182,725        96,843       150,666            69,869      950,861


     Depreciation
     At 1 January 2002                        44,264     38,934        90,060              -       45,599                   -     218,857
     Charge for the year                       9,000      5,154        15,932              -        5,585                   -      35,671
     Disposals                                     -          -          (268)             -            -                   -        (268)
     Translation                                   -          -          (269)             -            -                   -        (269)
     Write-offs                                 (190)         -        (1,309)             -          (25)                  -      (1,524)

     At 31 December 2002                      53,074     44,088       104,146              -       51,159                   -    252,467


     Net book value

     2002                                    227,805    125,791        78,579        96,843        99,507            69,869      698,394


     2001                                    225,847    110,452        82,622        70,697        89,309            60,016       638,943
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




9 Tangible fixed assets (continued)
Company                                           Terminal        Lands &         Plant &           Other           Assets in           Total
                                                complexes         airfields    equipment         property         the course
                                                                                                             of construction

                                                     €000            €000           €000           €000                €000            €000

Cost
At 1 January 2002                                  270,111        142,515         137,304        129,297             50,096          729,323
Additions                                              100            117           5,236             31             69,292           74,776
Transfer to completed assets                        10,858         20,540           4,713         15,758            (51,869)               -
Disposals                                                -           (164)           (362)             -                  -             (526)
Write-offs                                            (190)             -          (1,505)           (31)                 -           (1,726)

At 31 December 2002                                280,879        163,008        145,386         145,055             67,519         801,847


Depreciation
At 1 January 2002                                   44,264         38,934          68,097         42,254                    -        193,549
Charge for the year                                  9,000          5,154          13,032          5,533                    -         32,719
Disposals                                                -              -            (205)             -                    -           (205)
Write-offs                                            (190)             -          (1,309)           (25)                   -         (1,524)

At 31 December 2002                                 53,074         44,088          79,615         47,762                    -       224,539

                                                                                                                                                 55
Net book value

2002                                               227,805        118,920          65,771         97,293             67,519         577,308



2001                                               225,847        103,581          69,207         87,043             50,096          535,774


Lands and airfields (Group and Company) includes airport land at a cost of €19.6 million (2001: €19.8 million).

Fixed asset additions (Group) include internal architectural and engineering costs of €1.0 million (2001: €0.9 million). Fixed asset additions
(Company) include internal architectural and engineering costs of €0.9 million (2001: €0.9 million).

Fixed assets (Group and Company) include cumulative interest capitalised of €2.6 million (2001: €2.3 million). Interest of €0.3 million
(2001: €0.5 million) (Group and Company) was capitalised at an average rate of 5.6% per annum.

Certain hotel buildings were revalued on an open market basis by Donal O’Buachalla & Co Limited, at 31 December 1994. The valuations
were carried out in accordance with the Appraisal and Valuation Manuals published by the Society of Chartered Surveyors. The valuation
has been retained under the transitional provisions of Financial Reporting Standard 15 (FRS15) "Tangible Fixed Assets".
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     10 Intangible assets
                                                                      Concession              Goodwill                 2002                  2001
                                                                           rights                                      Total                 Total
     Group                                                                €’000                  €’000                €’000                 €’000

     Cost
     At 1 January                                                         14,870                      -               14,870               15,020
     Additions                                                             2,024                    526                2,550                    -
     Exchange movement                                                    (1,192)                     -               (1,192)                (150)

     At 31 December                                                       15,702                    526               16,228               14,870


     Amortisation
     At 1 January                                                           6,422                     -                6,422                 4,705
     Charge for the year                                                    2,072                    35                2,107                 1,775
     Exchange movement                                                       (184)                    -                 (184)                  (58)

     At 31 December                                                         8,310                    35                8,345                 6,422

     Net book value                                                         7,392                   491                7,883                 8,448


     Goodwill
56   On April 18, 2002, the Group’s partner in Kievrianta LLC redeemed its shares in the company. As a result the Group’s shareholding in
     Kievrianta LLC increased to 99% and that company is now accounted for as a subsidiary undertaking having previously been accounted for
     as an associated undertaking. In accordance with Financial Reporting Standard 2: “Accounting for Subsidiary Undertakings” (FRS 2), and
     in order to give a true and fair view, purchased goodwill has been calculated as the sum of the goodwill arising on each purchase of shares
     in Kievrianta LLC, being the difference at the date of each purchase between the fair value of the consideration given and the fair value of the
     identifiable assets and liabilities attributable to the interest purchased. This represents a departure from the statutory method, under which
     goodwill is calculated as the difference between cost and fair value on the date that Kievrianta LLC became a subsidiary undertaking. The
     statutory method would not give a true and fair view because it would result in the Group’s share of Kievrianta LLC’s retained reserves,
     during the period that it was an associated undertaking, being recharacterised as goodwill. The effect of this departure is to increase retained
     profits by €1.318 million and to increase purchased goodwill by €1.318 million.

     The consideration payable to the Group’s partner for the shares redeemed was €2.099 million. The total net assets in Kievrianta LLC on the
     date it became a subsidiary, and the share of net assets on that date were as follows:


                                                                                                            Total net assets         Share of net
                                                                                                                                  assets acquired
                                                                                                                       €000                 €000
     Fixed assets                                                                                                        529                  265
     Stocks                                                                                                            1,494                  747
     Debtors                                                                                                             116                   58
     Creditors                                                                                                        (1,346)                (673)

     Net assets at fair value excluding cash                                                                             793                  397

     Goodwill arising on acquisition                                                                                                          526

                                                                                                                                              923

     Satisfied by:
     Deferred payment                                                                                                                       2,099
     Cash transferred on acquisition                                                                                   2,352
     Less: existing share of cash                                                                                     (1,176)               (1,176)

                                                                                                                                              923
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




10 Intangible assets (continued)
The deferred consideration of €2.099 million in respect of the acquisition will be paid in April 2003, and is included in other creditors at
31 December 2002.

The fair value of the net assets acquired equalled the book value of net assets acquired except for a fair value adjustment of €65,000 in
relation to creditors which relates to the write back of a provision. The directors are confident that a payment will not be made in respect
of the provision.

The goodwill arising on the acquisition will be amortised over ten years which is the term of the concession agreement held by
Kievrianta LLC.


11 Fixed assets – financial
                                                                                1 January               Movements                31 December
                                                                                    2002             during the year                    2002
                                                                                    €000                      €000                      €000

Group
Joint venture undertakings
Share of gross assets                                                               20,055                       554                    20,609
Share of gross liabilities                                                         (26,248)                    1,220                   (25,028)
Loans to joint venture undertaking                                                   4,882                         -                     4,882

                                                                                    (1,311)                    1,774 (a)                   463
                                                                                                                                                     57
Associated undertakings
Equity interest at cost                                                           101,277                    (4,313) (b)                96,964
Goodwill                                                                            1,953                       (99)                     1,854
Loans to associated undertakings                                                      491                        79                        570
Share of post acquisition profits                                                  59,721                    15,675 (b)                 75,396
Dividends paid                                                                    (23,309)                   (3,571)                   (26,880)
Translation reserve                                                                11,952                    (4,378)                     7,574

                                                                                  152,085                      3,393                   155,478

Other financial assets
Other unlisted investments at cost                                                 27,270                       (149)                   27,121
Listed investments at cost                                                          2,955                          -                     2,955 (c)

                                                                                   30,225                       (149)                   30,076

Total financial assets                                                            180,999                      5,018                   186,017


Company
Ordinary shares in subsidiary undertakings at cost                                 24,339                      (583)                    23,756
Subordinated loans to subsidiary undertakings                                      89,485                   (84,407) (d)                 5,078
Other loans to subsidiary undertakings                                             13,527                    84,407                     97,934
Investment in joint venture undertaking                                             5,081                         -                      5,081

                                                                                  132,432                       (583)                  131,849



(a) The movement in investment in joint venture undertaking during the year relates to an increase in the share of retained profits.

(b) During the year the Group received a refund of €4.09 million in respect of the investment in an associated undertaking in accordance
    with the provisions of the purchase agreement for that investment. Also during the year the Group’s subsidiary, Aer Rianta International
    cpt, increased its holding of shares in Kievrianta LLC (see note 10). The initial investment of €0.222 million in Kievrianta LLC has been
    transferred from investments in associated undertakings, and share of profits in associated undertakings has been reduced by €1.045
    million, as Kievrianta is now accounted for as a subsidiary undertaking.
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     11 Fixed assets - financial (continued)
     (c) The market value of listed investments at 31 December 2002 was €1.4 million. The Group through its subsidiary, Aer Rianta
         International cpt, is entitled, subject to completion of that company’s obligations under a management agreement, to resell
         these shares at cost. The Group expects that these obligations will be met.

     (d) During 2002 subordinated loans to subsidiary undertakings of €84.4 million became unsubordinated.

     In the opinion of the directors, the realisable value of the investments is not less than the book amounts shown above.

     The principal operating subsidiary, associated and joint venture undertakings of the Group, all of which are included in the Group
     financial statements, are as set out below:

           Undertaking                                     Registered office               Nature of business                             % holding of
                                                                                                                                          ordinary shares
           Subsidiary undertakings
           Aer Rianta Finance plc                              Dublin, Ireland                Financing company                           100
           Aer Rianta International cpt                        Shannon, Ireland               International management                    100
                                                                                              services and airport investor
           Great Southern Hotels Limited                       Dublin, Ireland                Hotel operator                              100
           Aer Rianta International (North America) Inc.       Montreal, Canada               Duty-free shopping and related activities   100
           Kievrianta LLC                                      Kiev, Ukraine                  Duty-free shopping and related activities   99

           Associated undertakings
           Birmingham International Airport Limited            Birmingham, England            Airport                                     24.125
58         Airport Partners GmbH (1)                           Düsseldorf, Germany            Airport investor                            40
           Aer Rianta International (Middle East) W.L.L.       Manama, Bahrain                Duty-free shopping and related activities   49
           Lenrianta JSC                                       St. Petersburg, Russia         Duty-free shopping and related activities   48.3
           Aerofirst JSC                                       Moscow, Russia                 Duty-free shopping and related activities   33.3
           Global Travel Management S.A.                       Athens, Greece                 Consultancy                                 45
           Omnistone Limited                                   Cork, Ireland                  Cork Airport Business Park development      25
           Hamburg Airport Partners GmbH                       Hamburg, Germany               Airport investor                            20

           Joint venture undertakings
           Turckton Developments Limited                       Dublin, Ireland                Business park development                   50

     (1)
           The Group has a beneficial interest of 20% in the share capital of Flüghafen Düsseldorf GmbH (Düsseldorf Airport) through its investment
           in Airport Partners GmbH.

     All financial statements of subsidiary, associated and joint venture undertakings are co-terminous with the year-end of the Group other than in
     respect of Birmingham International Airport Limited and Aer Rianta Finance plc whose financial statements are prepared to 31 March and
     28 February year-ends respectively. Management accounts of these entities have been prepared to 31 December 2002 for the purposes of
     including the results of these companies in the Group financial statements. Transactions between the Group and its associated and joint
     venture undertakings are detailed in note 27.


     12 Stocks
                                                                                 Group                          Company
                                                                      2002                2001           2002             2001
                                                                      €000                €000           €000             €000

     Goods for resale                                               17,516               18,416        10,227            13,157
     Maintenance                                                     1,406                1,801         1,373             1,398

                                                                    18,922               20,217        11,600            14,555

     The replacement value of stocks is not materially different from the carrying amounts.
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




13 Debtors

                                                                     Group                            Company
                                                             2002              2001           2002                2001
                                                             €000              €000           €000                €000

Trade debtors                                              25,024             19,454         22,834              16,618
Due from subsidiary undertakings                                -                  -         33,220              16,709
Due from associated undertakings                              776              3,277              -                   -
VAT                                                         1,423              2,745          1,089               2,477
Other debtors                                               9,943              7,894          8,536               6,783

                                                           37,166             33,370         65,679              42,587

Debtors of €5.1 million (2001: €4.5 million), in the Group and debtors of €37.6 million (2001: €19.3 million) in the
Company, fall due after more than one year.


14 Creditors: amounts falling due within one year
Bank loans (note 16)                                       17,386             17,452         15,925              15,801
Bank overdraft                                                  -                923              -                   -
Trade creditors                                            15,077             30,981          5,038              26,841
Due to subsidiary undertakings                                  -                  -         22,126              11,947
Other creditors                                            27,949             24,766         10,489               8,988
Accruals and deferred income                               75,041             64,823         67,743              57,087   59

                                                          135,453            138,945        121,321          120,664


Tax included in other creditors:
Corporation tax                                              3,089             2,995          2,607               2,607
Capital gains tax                                              777             1,623             36                   -
PAYE                                                         2,827             2,873          2,571               2,700
PRSI                                                         1,720             1,959          1,578               1,795
Withholding tax                                                 85                35              -                   -



15 Creditors: amounts falling due after more than one year
Bank loans (note 16)                                      206,506             98,884         74,046           89,965
Other creditors                                             8,186              6,559          8,186            6,558
Loan notes (note 16)                                      248,752            248,635              -                -
Due to subsidiary undertakings                                  -                  -        374,000          249,000

                                                          463,444            354,078        456,232          345,523

Other creditors of €5.91 million (2001: €4.5 million), Group and Company, fall due after more than five years.
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     16 Financial liabilities
                                                                             Group                               Company
                                                                     2002              2001             2002             2001
                                                                     €000              €000             €000             €000

     Repayable by instalments:
     Repayable within one year                                     17,386             17,452          15,925            15,801
     Repayable within one to two years                             17,336             17,386          16,066            15,925
     Repayable within two to five years                            62,012             52,450          46,488            48,641
     Repayable after five years                                   127,158             29,048          11,492            25,399

                                                                  223,892            116,336          89,971           105,766


     Repayable by other than instalments:

     Repayable within one year                                          -                923                 -                   -
     Repayable after five years                                   248,752            248,635                 -                   -

                                                                  248,752            249,558                 -                   -

                                                                  472,644            365,894          89,971           105,766


     Included in creditors falling due within one year             17,386             18,375          15,925            15,801
60
     Included in creditors falling due after
     more than one year                                           455,258            347,519          74,046            89,965

     Included above are amounts of €10.3 million (2001: €11.6 million), Group and Company, which are guaranteed by
     the Irish State.

     The Group through its subsidiary Aer Rianta Finance plc has in issue €250 million of loan notes repayable in 2011
     at a fixed rate of 6.15% payable annually, which is included in financial liabilities repayable other than by instalments
     above. All amounts payable to noteholders are guaranteed by Aer Rianta cpt.

     Borrowing Facilities

     The Group has various undrawn committed borrowing facilities. At 31 December 2002 the undrawn committed
     facilities available in respect of which all conditions precedent had been met were as follows:
                                                                                                                         2002
                                                                                                                         €000

     Expiring in one year or less                                                                                       34,791
     Expiring in more than one year but not more than two years                                                          5,047
     Expiring in more than two years but not more than five years                                                       21,142
     Expiring in more than five years                                                                                   18,000

     Total                                                                                                              78,980



     17 Capital grants
                                                                             Group                               Company
                                                                     2002              2001             2002             2001
                                                                     €000              €000             €000             €000

     At 1 January                                                  32,150             33,873          31,045            32,769
     Amortised to profit and loss account                          (1,713)            (1,723)         (1,714)           (1,724)

     At 31 December                                                30,437             32,150          29,331            31,045

     A liability could arise to repay in whole, or in part, grants received, totalling €0.079 million (2001: €0.079 million),
     Group and Company, if certain circumstances set out in the grant agreements occur within ten years of the date of
     acceptance of these grants.
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




18 Provisions for liabilities and charges
                                                                 Deferred tax         Restructuring                     Total
                                                                                            (note 4)
Group                                                                   €000                  €000                     €000
At 1 January 2002                                                       1,494               28,500                    29,994

Charge for the year (note 7)                                            1,331                     -                     1,331
Utilised in year                                                            -               (18,697)                  (18,697)

At 31 December 2002                                                     2,825                 9,803                   12,628



Company

At 1 January 2002                                                       (1,540)              28,500                   26,960

Charge for the year (note 7)                                            1,775                     -                     1,775
Utilised in year                                                            -               (18,697)                  (18,697)

At 31 December 2002                                                          235              9,803                   10,038


The deferred tax provision at 31 December 2002 in the Group of €2.8 million was made up of €5.1 million in respect of timing
differences on capital allowances, less €1.1 million in relation to tax losses carried forward and less €1.2 million reflecting
amounts not deductible for corporation tax in the current year.
                                                                                                                                  61
In the Company the deferred tax provision at 31 December 2002 of €0.2 million was made up of €1.6 million in respect of
timing differences on capital allowances, less €1.4 million reflecting amounts not deductible for corporation tax in the
current year.



19 Called up share capital - equity
                                                                                                    Group and Company

                                                                                               2002                     2001
                                                                                               €000                     €000
Authorised:
250,000,000 ordinary shares of €1.27 each                                                   317,500                  317,500



Allotted, called up and fully paid:

At 1 January - 146,721,889 ordinary shares of €1.27 each (IR£1.00 each)                     186,337                  186,299
Renominalisation of share capital                                                                 -                       38



At 31 December – 146,721,889 of ordinary shares of €1.27 each                               186,337                  186,337



All the ordinary shares are beneficially held by the Minister for Finance.
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     20 Reserves
                                                                   Profit
                                                                  & loss    Translation      Other           Total
                                                                 account       reserve    reserves       reserves
                                                                   €000          €000        €000           €000

     Group
     At 1 January 2002                                           172,602        10,776      2,523        185,901

     Retained profit for the year                                 36,223             -           -           36,223
     Currency translation adjustment                                   -        (5,132)          -           (5,132)

     At 31 December 2002                                         208,825         5,644      2,523        216,992



     As follows:
     Aer Rianta cpt                                               65,358             -          -            65,358
     Subsidiary undertakings                                      92,958        (1,930)     2,277            93,305
     Joint venture undertakings                                    2,239             -          -             2,239
     Associated undertakings                                      48,270         7,574        246            56,090

                                                                 208,825         5,644      2,523        216,992


62
     21 Reconciliation of operating profit to cash inflow from operating activities
                                                                                                     Group

                                                                                            2002              2001
                                                                                            €000              €000

     Operating profit                                                                      33,274            41,958
     Depreciation charge                                                                   35,671            30,608
     Amortisation of intangible assets                                                      2,107             1,775
     Amortisation of financial assets                                                          99                 -
     Tangible fixed asset write-offs                                                          202                63
     Amortisation of capital grants                                                        (1,713)           (1,723)
     Profit on sale of tangible fixed assets                                                  (66)             (165)
     Decrease in stocks                                                                     2,789               472
     (Increase)/decrease in debtors                                                        (2,658)            3,700
     (Decrease)/increase in creditors                                                      (6,409)            6,209

                                                                                           63,296            82,897
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




22 Analysis of headings grouped in cash flow statement
                                                                        Group

                                                               2002               2001
                                                               €000               €000

Returns on investments and servicing of finance

Interest received                                              1,397              3,676
Interest paid                                                (21,093)            (9,186)
Investment income                                              1,344                298

                                                             (18,352)            (5,212)



Capital expenditure and financial investment
Purchase of tangible fixed assets                            (94,963)       (114,590)
Sale of tangible fixed assets                                  6,953             311
Investment in financial assets                                     -         (13,264)
Sale of financial assets                                           -           5,272

                                                             (88,010)       (122,271)



Acquisitions and disposals                                                                 63
Adjustment to consideration for associated undertakings        4,090                  -
Net cash acquired with subsidiary                              2,352                  -
Investment in associated undertakings                              -               (397)
Loan to associated undertaking                                   (79)              (491)
Loan to joint venture undertaking                                  -             (3,612)

                                                               6,363             (4,500)



Financing
Net proceeds from issue of loan notes                              -         248,542
New bank loans                                               125,000           5,079
Repayments of amounts borrowed                               (17,444)       (158,865)

                                                             107,556            94,756



23 Reconciliation of net cash flow to movement in net debt
                                                                                 Group
                                                                                  2002
                                                                                 €000

Increase in cash in the year                                                   6,100
Increase in liquid resources                                                  48,697
Increase in debt                                                            (107,556)

Change in net debt resulting from cash flows                                    (52,759)
Non-cash movements                                                                 (117)
Foreign exchange movements                                                       (2,347)

Movement in net debt in the year                                                (55,223)

Net debt at 1 January 2002                                                  (320,566)

Net debt at 31 December 2002                                                (375,789)
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     24 Analysis of net debt
                                                      At             Cash        Non-cash           Foreign         At
                                               1 January             flow       movement          exchange 31 December
                                                    2002                                          movement        2002
                                                   €000             €000              €000            €000        €000
     Cash                                         19,933            5,177                -           (2,347)    22,763
     Bank overdraft                                 (923)             923                -                -          -
     Liquid resources                             25,395           48,697                -                -     74,092

                                                  44,405           54,797                  -          (2,347)          96,855



     Debt due within one year                    (17,452)          17,444           (17,378)                -         (17,386)
     Debt due after one year                    (347,519)        (125,000)           17,261                 -        (455,258)

                                                (364,971)        (107,556)             (117)                -        (472,644)

     Total                                      (320,566)         (52,759)             (117)          (2,347)        (375,789)



     25 Financial instruments
     Narrative disclosures concerning the Group's treasury policy and management are set out in the Financial Review. The required disclosures
     in respect of relevant financial assets and liabilities (as defined) in accordance with Financial Reporting Standard 13 (FRS 13) "Derivatives and
64
     Other Financial Instruments" are provided below. Relevant financial assets/liabilities exclude short-term debtors and creditors and investments
     in shares in subsidiaries, associated undertakings and joint ventures.

     (i) Interest rate risk profile of financial liabilities and assets

     After taking into account, where relevant, the various interest rate swaps and forward foreign currency contracts entered into by the Group,
     the interest rate profile of the Group's relevant financial liabilities and interest bearing relevant financial assets at 31 December 2002 was:

                                                                                      Total    Floating rate        Fixed rate

                                                                                      €000             €000              €000

     Financial liabilities
     Euro                                                                          472,644            69,324          403,320


     Financial assets
     Euro                                                                           86,589            86,589                  -
     Sterling                                                                        1,638             1,638                  -
     US dollar                                                                       6,017             6,017                  -
     Canadian dollar                                                                 2,607             2,607                  -
     Hong Kong dollar                                                                    4                 4                  -

                                                                                    96,855            96,855                  -



     The weighted average interest rate for fixed rate euro currency financial liabilities was 5.9% (2001: 6.3%) and the weighted average period for which the
     rate is fixed was 10.9 years (2001: 8.8 years). There were no financial liabilities on which no interest is paid. The floating rate financial liabilities were
     comprised of bank borrowings that bore interest at rates on up to twelve-month EURIBOR. The floating rate financial assets were comprised of term and
     call bank deposits of less than one year that bore interest based on market rates. No interest is received on loans to associates and joint venture
     undertakings or on listed or unlisted investments.
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




25 Financial instruments (continued)
(ii) Currency exposures

The table below shows the Group’s currency exposure, being those assets and liabilities (or non-structural exposures) that give rise
to the net monetary gains and losses recognised in the profit and loss account. Such exposures comprise the monetary assets and
liabilities of the Group that are not denominated in the functional currency of the unit involved. These exposures were as follows:

                                                                           Net foreign currency monetary assets €000

As at 31 December 2002                                                         Sterling       US dollar         Canadian
                                                                                                                   dollar
Functional currency of Group operations
Euro                                                                               439             7,430                221
Canadian dollar                                                                      -                29                  -

                                                                                   439             7,459                221



                                                                           Net foreign currency monetary assets €000

As at 31 December 2001                                                         Sterling       US dollar         Canadian
                                                                                                                   dollar

Functional currency of Group operations
Euro                                                                             1,432           14,179                 214
                                                                                                                                       65
Canadian dollar                                                                      -               22                   -

                                                                                 1,432           14,201                 214



The amounts shown in the table above take into account the effect of any currency swaps, forward contracts and other
derivatives entered into to manage these currency exposures.

(iii) Fair values of financial liabilities and assets

Set out below is a comparison by category of book values and fair values of the Group’s relevant financial liabilities as
at 31 December 2002.

                                                                                            Book Value         Fair Value
                                                                                                 €000               €000

Primary financial instruments held or issued to finance the Group’s operations
Short-term financial liabilities and current position
of long-term borrowings (note 16)                                                                17,386           18,209
Long-term borrowings (note 16)                                                                  455,258          474,887

                                                                                                472,644          493,096



Derivative financial instruments held to manage the interest rate and currency profile:
Interest rate swaps                                                                                     -               (526)



Derivative financial instruments held or issued to hedge the
currency exposure on expected future sales:
Forward foreign exchange contracts                                                                      -               141



Where available, market values have been used to determine fair values. Where market values are not available,
fair values have been calculated by discounting expected cash flows at prevailing interest rates.

At the balance sheet date the fair values of the relevant financial assets and other creditors falling due after more
than one year were not materially different from their carrying value other than as indicated in note 11 in respect
of listed investments.
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     25 Financial instruments (continued)
     (iv) Hedges

     As set out in the Financial Review, the Group enters into forward foreign currency contracts to eliminate the currency exposure that arises on cash flows
     denominated in foreign currencies. It also uses interest rate swaps and forward rate agreements to manage its interest rate profile. As set out in the
     Statement of Accounting Policies, changes in the fair value of instruments used as hedges are not recognised in the financial statements until the hedged
     position matures. An analysis of these unrecognised gains and losses is as follows:

                                                                                     Gains        Losses      Total net
                                                                                                         gains/(losses)
                                                                                      €000          €000          €000

     Unrecognised gains and losses on hedges on 1 January 2002                          23           (310)             (287)
     Gains and losses arising in previous years recognised in 2002                      23            (55)              (32)



     Gains and losses arising before 1 January 2002 not recognised in 2002               -           (255)             (255)
     Gains and losses arising in 2002 not recognised in 2002                           141           (271)             (130)



     Unrecognised gains and losses on hedges at 31 December 2002                       141           (526)             (385)


66   Of which:

     Gains and losses expected to be recognised in 2003                                141            (77)               64
     Gains and losses expected to be recognised in 2004 or later                         -           (449)             (449)

                                                                                       141           (526)             (385)



     26 Commitments
                                                                            Group                            Company
                                                                    2002              2001          2002            2001
                                                                    €000              €000          €000            €000

     (i) Capital commitments
     Contracted                                                    20,187            38,896       14,468           22,221
     Authorised by the directors but not contracted for            63,224            84,526       63,224           82,621

     At 31 December                                                83,411           123,422       77,692          104,842



     (ii) Operating leases

     Leasing commitments payable during the
     next twelve months were made up as follows:

     Plant and equipment

     Payable on leases which expire within:
     One year                                                          55                51            -                -
     Two to five years                                              1,554             1,733        1,525            1,689

                                                                    1,609             1,784        1,525            1,689
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




26 Commitments (continued)
                                                                      Group                              Company
                                                              2002              2001             2002            2001
                                                              €000              €000             €000            €000

Buildings

Payable on leases which expire within:
Two to five years                                             6,774             8,476                -                -



(iii) Other commitments

In the normal course of business the Group’s fuel aviation supply business enters into commitments for the future supply of aviation fuel
for resale to customers at one of its airports. At 31 December 2002, the value of such fuel purchase commitments for periods up to
March 2004 pursuant to fuel supply agreements was €39.3 million (2001: €48 million).



27 Related party disclosures
The related parties of the Group, as defined by Financial Reporting Standard 8 (FRS 8) "Related Party Disclosures",
the nature of the relationship and the extent of transactions with them (excluding subsidiary undertakings),
are summarised below.

                                                                                                 2002            2001                        67
                                                                                                 €000            €000

Management charges to associated undertakings                                                    6,270           6,247
Charges to associated undertakings in respect
of services provided by the Group                                                                1,363           2,100
Sales at cost to associated undertakings                                                         1,535           1,329
Payments made by the Group on behalf of
associated undertakings                                                                            618           4,378
Due from associated undertakings at year end                                                     1,346           3,768
Dividends received from associated undertakings                                                  4,456           5,268
Due from joint venture undertakings at year-end                                                  4,882           4,882

In common with many other government and state bodies, the Group deals in the normal course of business with
other government and state bodies, such as Aer Lingus, ESB, An Post, Irish Aviation Authority and the Department for Transport.

Details of the Group's principal associated and joint venture undertakings are set out in note 11.



28 Minority interest
Duty Free Opportunities (Asia) Limited is the minority partner (35%) in Aer Rianta International (East Asia) Limited, and a minority party
(1%) in Kievrianta LLC.
     Aer Rianta cpt Annual Report and Accounts 2002

     Notes (continued)
     for the year ended 31 December 2002




     29 Associates and joint ventures
     In accordance with the requirements of Financial Reporting Standard 9 (FRS 9): "Associates and Joint Ventures", the following additional
     information is given about associated and joint venture undertakings which play a significant part in the operations of the Group
     where applicable.

     The Group’s share of turnover, fixed assets, current assets, liabilities due within one year and liabilities due after more than one year of all
     associated undertakings is as follows:

                                                                                                        2002              2001
                                                                                                        €000              €000

     Turnover                                                                                         152,564          151,145
     Fixed assets                                                                                     319,723          301,631
     Current assets                                                                                    52,935           51,450
     Liabilities due within one year                                                                  (49,023)         (37,916)
     Liabilities due after one year or more                                                          (227,688)        (184,469)

     The capital development programme of all associated undertakings amounts to some €496 million over the next five years.

     The Group’s share of the results, assets and liabilities of Airport Partners GmbH (an associated undertaking which exceeds certain
     size criteria set down in FRS 9) is as follows:

     Turnover                                                                                          62,820            63,563

     Profit before tax                                                                                 11,738             2,893
68   Taxation                                                                                          (6,969)           (1,374)
     Profit after tax                                                                                   4,769             1,519

     Fixed assets                                                                                     218,345          215,687
     Current assets                                                                                     9,399           13,944
     Liabilities due within one year                                                                  (27,144)         (12,899)
     Liabilities due after one year or more                                                          (166,416)        (155,215)



     Profit before tax in 2002 included an exceptional gain and exceptional operating costs, the Group’s share of which amounted
     to €14.0 million and €2.0 million respectively.

     Consistent accounting policies are adopted by the Group except as follows:

     Airport Partners GmbH - accounting for pensions in Flüghafen Düsseldorf GmbH (FDG), which is a member of the Supplementary
     Pension Fund of the state capital of Düsseldorf (Zusatzvers orgungsuasse, ZVK). As a member of ZVK, Flüghafen Düsseldorf GmbH
     is obliged to register all qualifying employees with ZVK. The qualifying employees have a direct claim against ZVK for payment of old
     age and surviving dependants' benefits. It is not practical to amend this accounting policy to accord with the Group's treatment of
     same nor is it possible to quantify the effect of the differences in accounting treatment in the Group financial statements at this time.

     Birmingham International Airport Limited has adopted a policy of revaluing assets whereas the Group does not have such a policy.
     The share of profits and share of net assets included in the Group’s financial statements have been calculated in accordance with the
     Group’s accounting policies and adjusted to eliminate the impact of revaluation of assets in Birmingham International Airport Limited.



     30 Pensions
     The Group operates, or participates in, pension schemes in respect of the parent company and its principal subsidiary undertakings
     covering the majority of its employees. The pension scheme assets are held in separate, Revenue approved, trustee administered funds.

     The Group continues to account for pensions in accordance with Statement of Standard Accounting Practice No. 24 (SSAP 24):
     ‘Accounting for Pension Costs’. The pension cost to the Group for the financial year amounted to €6.186 million (2001: €4.352 million).

     The actuarial valuations of the Irish Airlines (General Employees) Superannuation Scheme and the Great Southern Hotels Scheme are
     available for inspection by members of the schemes and their dependants but not by the general public.

     Aer Rianta cpt
     The majority of the Group’s employees are those of the parent company, Aer Rianta cpt, whose permanent employees over the age of twenty
     are members of the Irish Airlines (General Employees) Superannuation Scheme. This scheme is operated in conjunction with a number
     of other employers. The Company’s current and past employees comprise a minority of the membership of this multi-employer scheme.
Aer Rianta cpt Annual Report and Accounts 2002

Notes (continued)
for the year ended 31 December 2002




30 Pensions (continued)
The Company and employees contribute a fixed percentage of salaries each year to this scheme which does not vary according to the
funded level of the scheme. Accordingly, no additional disclosures in the context of reporting under Financial Reporting Standard 17
(FRS 17), “Retirement Benefits” are required. The pension cost to the Group for the financial year in relation to this scheme amounted to
€5.571 million (2001: €3.790 million). It is the intention of the Company, subject to Ministerial approvals, to set up its own defined
benefit pension scheme for eligible Aer Rianta cpt employees.

Aer Rianta International cpt

Aer Rianta International cpt operates a defined contribution pension scheme for all its full time permanent employees who have attained the
age of 24 years. The pension cost in relation to this scheme for the financial year amounted to €0.272 million (2001: €0.225 million).

Great Southern Hotels Group

(a) SSAP 24 " Accounting for pension costs" disclosures

    Great Southern Hotels Group operates a revenue approved defined benefit pension scheme covering that Group's permanent
    employees over the age of twenty. The contributions payable to the scheme by the Group and the members are laid down in the
    scheme rules and are made in accordance with the advice of an independent qualified actuary and an actuarial valuation of the assets
    and liabilities of the scheme is carried out at intervals of three years.

    The latest actuarial valuation of the scheme was carried out on 1 May 2000 using the Aggregate Funding Method. For the purposes of
    the valuation it was assumed that the long-term rate of investment return would exceed the general level of salary inflation by 2% per
    annum and that the age of retirement would be 65 for all members. The actuarial valuation disclosed that the scheme is adequately
    funded on a discontinuance basis. The actuarial valuation also disclosed that the mid-market value of the scheme's assets amounted
    to €8.4 million and that the level of funding was in excess of 100%.                                                                      69
    The cost in relation to this scheme for the financial year amounted to €0.343 million (2001: €0.337 million).

(b) FRS 17 "Retirement Benefits" disclosures

    An independent actuarial review as at 31 December 2002 disclosed a net deficit of the present value of accrued scheme liabilities of
    €3.3 million (2001: €Nil) over the total fair value of assets.

    Had FRS 17 been reflected in the primary financial statements of the Great Southern Hotels Group, the following are the amounts that
    would have been included in the Profit and Loss Account and the Statement of Total Recognised Gains and Losses:

                                                                                                                2002
                                                                                                                €000

    Net charge to operating profit                                                                                  391

    Net decrease in finance costs                                                                                   90

    Net movement included in statement of total recognised gains and losses                                   (3,372)


    The full disclosures required under FRS 17 are set out in the consolidated financial statements of Great Southern Hotels Limited.



31 Comparative figures
The comparative figures have been regrouped where necessary on the same basis as those for the current year.



32 Approval of financial statements
The financial statements were approved by the Board on 26 March 2003.
     Aer Rianta cpt Annual Report and Accounts 2002

     Five year summary of financial results


                                                                     2002        2001        2000        1999        1998
                                                                     €000        €000        €000        €000        €000

     Operating results


     Turnover                                                     420,874     438,320     424,992     371,949     338,216


     Group EBITDA                                                  69,804      72,553      84,749      72,366      77,520


     Group operating profit                                        33,274      41,958      57,627      49,336      60,925
     Share of profits of associates,
     joint ventures and investment income                           43,982      25,543      25,443      15,990      15,511
     Net interest payable – Group joint ventures and associates    (32,912)    (26,083)    (17,721)    (11,704)    (11,650)
     Exceptional items                                               6,056     (23,228)          -           -       1,648


     Profit before taxation                                         50,400     18,190       65,349      53,622     66,434
     Taxation                                                      (14,172)    (6,627)     (19,739)    (14,231)    (5,675)
     Minority interest                                                  (5)         4            6          24        183


     Profit for the financial year                                 36,223      11,567      45,616      39,415      60,942
70

     Capital employed

     Tangible fixed assets                                        698,394     638,943     545,836     491,690     370,818
     Intangible assets                                              7,883       8,448      10,315      11,495      11,047
     Financial assets                                             186,017     180,999     153,788     108,052      97,513
     Net current assets/(liabilities)                              17,490     (40,030)    (52,312)    (67,389)    (33,596)


     Total assets less current liabilities                         909,784     788,360     657,627     543,848     445,782
     Creditors over one year                                      (463,444)   (354,078)   (263,529)   (202,152)   (145,280)
     Capital grants                                                (30,437)    (32,150)    (33,873)    (35,621)    (37,409)
     Provisions for liabilities and charges                        (12,628)    (29,994)     (2,385)       (429)       (542)

     Net assets                                                   403,275     372,138     357,840     305,646     262,551
Aer Rianta cpt Annual Report and Accounts 2002

Five year summary of financial results (continued)


                                                               2002         2001        2000        1999       1998
                                                               €000         €000        €000        €000       €000

Summary Cash Flow

Cash flow from operating activities                           63,296      82,897      78,771      62,602      86,992
Payments in respect of exceptional restructuring programme   (18,697)          -           -           -           -
Dividends from associated undertakings                         3,571       5,268       2,931         664         757

                                                              48,170      88,165      81,702      63,266      87,749


Net interest paid/investment income                          (18,352)      (5,212)    (11,655)     (7,367)    (7,503)
Corporation tax paid                                            (930)     (10,406)     (9,537)       (629)    (1,318)

                                                              28,888      72,547      60,510      55,270      78,928



Investment in tangible fixed assets                           (94,963)   (114,590)    (94,316)   (132,085)   (84,269)
Capital grants received                                             -           -           -          25      4,741
Investment in/loans to associated and joint
venture undertakings and financial assets                       4,011     (17,764)    (23,669)      2,220          -
Purchase of subsidiary undertakings
including the related financial assets                          2,352           -           -          -     (13,472)
Sale of tangible and other assets and subsidiary undertakings   6,953       5,583           -         88       8,547

                                                             (81,647)    (126,771)   (117,985)   (129,752)   (84,453)   71

                                                             (52,759)     (54,224)    (57,475)    (74,482)    (5,525)

Dividends/surrender to shareholder                                  -           -           -           -    (18,919)

Cash out flow before management of
liquid resources and financing                               (52,759)     (54,224)    (57,475)    (74,482)   (24,444)


Net debt

Group net debt at year end                                   375,789     320,566     266,253     208,262     131,765
     Aer Rianta cpt Annual Report and Accounts 2002

     Five year summary of passenger statistics


     Passengers                                 2002        2001         2000         1999         1998

     Overall
     Transatlantic                         1,417,268    1,616,680    1,649,446    1,462,686    1,223,028
     Great Britain                         9,615,579    9,127,224    9,122,192    8,725,929    8,276,664
     Europe                                6,677,365    6,012,375    5,362,380    4,541,645    3,821,266
     Domestic                              1,042,135    1,121,304    1,135,880    1,054,252      931,247
     Transit                                 560,297      636,447      662,042      707,647      544,127

     Total                                19,312,644   18,514,030   17,931,940   16,492,159   14,796,332

     Percentage growth year-on-year            +4.3%       +3.2%        +8.7%       +11.5%       +10.8%


     Dublin
     Transatlantic                           798,902      939,329      966,451      829,759      674,328
     Great Britain                         7,884,031    7,438,259    7,419,183    7,226,495    6,919,221
     Europe                                5,627,552    5,169,717    4,644,792    3,989,831    3,384,545
     Domestic                                650,965      656,834      661,062      610,962      539,444
     Transit                                 123,217      129,416      152,040      144,984      123,562

     Total                                15,084,667   14,333,555   13,843,528   12,802,031   11,641,100

     Percentage growth year-on-year            +5.2%       +3.5%        +8.1%        +9.9%       +12.7%


72   Shannon
     Transatlantic                           617,877     677,068      682,715      632,780      548,559
     Great Britain                           702,313     714,285      751,176      609,587      557,117
     Europe                                  495,324     363,251      317,264      221,089      170,475
     Domestic                                117,871     158,362      164,665      182,070      158,425
     Transit                                 420,145     491,692      492,432      542,628      405,432

     Total                                 2,353,530    2,404,658    2,408,252    2,188,154    1,840,008

     Percentage growth year-on-year            -2.1%       -0.1%       +10.1%       +18.9%        +1.0%


     Cork
     Transatlantic                               489         283          280          147          141
     Great Britain                         1,029,235     974,680      951,833      889,847      800,326
     Europe                                  554,489     479,407      400,324      330,725      266,246
     Domestic                                273,299     306,108      310,153      261,220      233,378
     Transit                                  16,935      15,339       17,570       20,035       15,133

     Total                                 1,874,447    1,775,817    1,680,160    1,501,974    1,315,224

     Percentage growth year-on-year            +5.6%       +5.7%       +11.9%       +14.2%        +9.9%


     Terminal freight including mail (metric tonnes)

     Dublin                                  116,739     140,126      150,023      145,391      134,650
     Shannon                                  48,094      50,181       53,398       45,974       44,037
     Cork                                     12,852      11,743       10,894       11,047       12,818

     Total                                   177,685     202,050      214,315      202,412      191,505

     Percentage growth year-on-year           -12.0%       -5.7%        +5.9%        +5.7%       +12.5%
Aer Rianta cpt Annual Report and Accounts 2002

Five year summary of aircraft movements


                                                   2002      2001      2000      1999      1998

Aircraft movements

Overall

Commercial
- Scheduled                                      187,993   193,329   188,912   172,686   162,266
- Non Scheduled                                   27,961    27,235    25,573    24,937    22,573
- Training                                        24,489    35,401    42,325    38,775    32,663
Others                                            23,211    28,302    27,646    28,549    28,102

Total                                            263,654   284,267   284,456   264,947   245,604

Percentage growth year-on-year                    -7.2%     -0.1%     +7.4%     +7.9%     +6.6%


Dublin

Commercial
- Scheduled                                      151,069   154,910   145,976   140,154   132,558
- Non-Scheduled                                   15,604    15,152    16,221    12,944    12,259
- Training                                         1,937     1,390     1,328     1,522     1,092
Others                                            13,265    14,250    16,720    15,801    16,177

Total                                            181,875   185,702   180,245   170,421   162,086

Percentage growth year-on-year                    -2.0%     +3.0%     +5.8%     +5.1%     +7.8%    73


Shannon

Commercial
- Scheduled                                       17,528    18,915    19,657    16,308    14,218
- Non Scheduled                                    8,693     7,996     7,925     8,946     7,528
- Training                                         5,646    13,402    18,745    18,825    16,663
Others                                             4,996     7,671     7,540     7,335     7,367

Total                                             36,863    47,984    53,867    51,414    45,776

Percentage growth year-on-year                   -23.2%    -10.9%     +4.7%    +12.3%    +13.9%


Cork

Commercial
- Scheduled                                       19,396    19,504    23,279    16,224    15,490
- Non Scheduled                                    3,664     4,087     1,427     3,047     2,786
- Training                                        16,906    20,609    22,252    18,428    14,908
Others                                             4,950     6,381     3,386     5,413     4,558

Total                                             44,916    50,581    50,344    43,112    37,742

Percentage growth year-on-year                   -11.2%     +0.5%    +16.8%    +14.2%     -5.4%
     Aer Rianta cpt Annual Report and Accounts 2002

     General Business and Aeronautical Information


     Dublin Airport                                                      Shannon Airport
     Location           Lat.532517N, Long.061612W                        Location          Lat. 524207N, Long. 085529W
                        (midpoint runway 10/28)                          Elevation         46ft. AMSL
     Elevation          242 ft. AMSL                                     Runway Data       06/24 Length 3199 metres
     Runway Data        10/28 Length 2637 metres                                           Width 45 metres plus 8m shoulders each side
                        Width 45 metres                                                    Surface asphalt, Category 2
                        plus 7.5 m shoulders each side
                        Surface concrete, Category 3 (runway 28)
                        Category 2 (runway10)                                             13/31 Length 1720 metres
                                                                                          Width 45 metres
                        16/34 Length 2072 metres                                          Surface asphalt - concrete
                        Width 61 metres                                                   N.Inst
                        Surface asphalt, Category 1 (runway 16)          Refueling        Full refueling facilities available
                        Non inst (runway 34)                             Operational Hrs  24 hrs
                                                                         Postal Address   Shannon Airport, Co.Clare, Ireland
                      11/29 Length 1357 metres                           Fax Number       (061) 712282 (Airport Operations Dept)
                      Width 61 metres                                                     (061) 471719 (Shannon Aviation Fuels)
                      Surface asphalt – concrete                         Telephone Number National (061) 712000 (24 hr)
                      N. Inst                                                             Intl 353-61-712000 (24 hr)
     Refueling        Full refueling facilities available                Web              www.shannonairport.com
                      – AVGAS 100 LL, JET A1                             Sita             SNN RRCR
     Operational Hrs  24 hrs
74   Postal Address   Dublin Airport, Co. Dublin, Ireland
     Fax Number       (01) 814 1034 (09:00 – 17: 00)
                      (01) 814 4643 (24hrs)
     Telephone Number National (01) 814 1111
                      Intl 353-1 – 814 1111
     Web              www.dublinairport.com
     Sita             DUBRB7X (Airport Administration)
                      DUBYREI (Operations)


     Cork Airport
     Location           Lat.515029N, Long. 082928W
     Elevation          502 ft . AMSL
     Runway Data        17/35 Length 2133 metres
                        Width 45 metres plus 7.5 m shoulders each side
                        Surface asphalt, Category 2

                        07/25 Length 1310 metres
                        Width 45 metres
                        Surface concrete
                        N. Inst.


     Refueling          Full refueling facilities available
     Operational Hrs    24 hrs
     Postal Address     Cork Airport, Co. Cork, Ireland
     Fax Number         (021) 431 3442
     Telephone Number   National (021) 431 3131
                        Intl 353 – 21- 431 3131
     Web                www.corkairport.com
     Sita               ORKKFEI
Aer Rianta cpt Annual Report and Accounts 2002

General Business and Aeronautical Information (continued)


Aer Rianta           Head Office,
                     Old Central Terminal Building
                     Dublin Airport, Co.Dublin, Ireland
                     Tel: (01) 814 1111
                     Intl 353 1 814 1111
                     Fax: (01) 814 4120
                     Intl 353 1 814 4120
                     Web: www.aerrianta.com

Registered Office    Dublin Airport, Co.Dublin, Ireland



Aer Rianta           Head Office, Shannon Airport,
International        Co. Clare, Ireland.
                     Tel: (061) 712 777
                     Intl 353 61 712 777
                     Fax: (061) 474 595
                     Intl 353 61 474 595
                     Web: www.ari.ie




Aer Rianta           4th Floor, Falcon Tower Building,
International        Diplomatic Area, P.O. Box 5334,
                                                                     75
Middle East          Manama, Bahrain.
                     Tel: 00 973 537979
                     Fax: 00 973 533741



Aer Rianta Finance Old Central Terminal Building,
                   Dublin Airport, Co.Dublin, Ireland
                   Tel: (01) 814 1111
                   Intl 353 1 814 1111



Great Southern       Head Office,
Hotels               6, Charlemont Terrace,
                     Dun Laoghaire, Co. Dublin, Ireland
                     Tel: (01) 214 4800
                     Intl 353 1 214 4800
                     Fax: (01) 214 4805
                     Intl 353 1 214 4805
                     Web: www.greatsouthernhotels.com



Auditors             KPMG
                     1, Stokes Place, St. Stephens Green, Dublin 2



Principal Bankers    Bank of Ireland
                     Allied Irish Banks
                                                               design by www.reddog.ie



                                                                                         Annual Report & Accounts 2002
Aer Rianta’s strategy is to be a premier Irish international
airport owner and operator, meeting the needs and
expectations of customers, using resources effectively,
fully realising the capabilities and potential of staff and
optimising long-term shareholder value.

The Group’s core business is the development, operation
and management of the three principal Irish airports,
Irish and international airport retail management and
international airport investment.

				
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